Andreas
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Andreas in Gainers & Losers,

Investment idea - Potash Corp

After collapse of the largest cartel of in the fertilizer market consisted of the Russian Uralkali and the Belarusian Belaruskali, fertilizer prices decreased and fell to USD 300 per tonne this year from USD 400 per tonne last year. Stocks of the industry declined simultaneously with fertilizer prices. As a result, a good opportunity for M&A transactions appeared. Recently, Potash Corp (POT) has made an offer to acquire the German fertilizer producer K + S for USD 8.7 bn. Market cap of the latest is USD 4.5 bn now, which is almost two times lower than the offer price. Though the proposal of PotashCorp was rejected by K + S management, in my opinion, the deal is still possible and the talks will continue. Moreover, situation in the potash market remains difficult, and the merger would help both companies. I believe that the name offers an attractive mid-term investment opportunity since acquisition is still possible.