Canadian giant Potash Corp. of Saskatchewan (TSX: POT; NYSE: POT) is considering a mega deal for Germany's K+S Aktiengesellschaft that could materially change the landscape in the fertilizer business. The world's largest potash producer announced on June 25 that it had made a "private proposal" to K+S that sets the stage for negotiations.
The deal would allow PotashCorp to re-assert some of its historic dominance over the fertilizer market since a combination of the two major companies would account for roughly 30% of global potash production. K+S owns the Legacy potash project in Saskatchewan, which it is developing for $4.1 billion. K+S reported in mid-March that it had secured roughly 75% of the development capital for the new mine.
Legacy is expected to produce nearly 3 million tonnes of potash annually after it hits production next year. The issue for Potash Corp is that K+S is not a member of the Canadian Potash Exporters (Canpotex), which essentially manages the Saskatchewan potash industry and exports an average of 9 million tonnes annually. PotashCorp accounts for the largest portion of that total, while Mosaic (NYSE: MOS) and Agrium (TSX: AGU; NYSE: AGU) round out the membership list.
Read the complete article at NorthernMiner.com/news/potash-corp