Potash Deal For K+S Highlights Industry Issues
Summary Potash bid for K+S seems highly unlikely due to regulator issues, especially in Germany. The deal is needed to limit or consolidate capacity in fertilizer where high margins encourages adding capacity. Potash is not a stock to own unless it can complete this merger at an attractive value and reduce capacity. The desire of Potash Corp. (NYSE: POT ) to buy out K+S AG ( OTCQX:KPLUY ) ( OTCPK:KPLUF ) is no surprise to the market. The German company has high-cost potash mines in Germany, but more importantly, it is building a potash mine in Canada that could flood the market with supply of the valuable fertilizer at a time it isn't needed. Or at least it isn't needed for Potash to maintain its high margins. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please read the disclaimer page for more details.