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- Proposal brings together two best-in-class companies with complementary assets and minimal overlap
- PotashCorp supportive of K+S operations, employees and communities, and believes K+S management and employees to be an important part of a successful combination
- Proposal not predicated on closing mines, curtailing production, selling the salt business or cutting jobs
- Well capitalized, diversified enterprise provides platform for future growth and greater opportunities for K+S employees' career growth and employment stability
- Proposal of €41 per share in cash provides 57 percent premium to the volume weighted average share price during the prior 12 months, and certain value to K+S shareholders
SASKATOON, July 2, 2015 /CNW/ - Potash Corporation of Saskatchewan Inc. (PotashCorp) acknowledged the statement issued today by K+S Aktiengesellschaft (K+S) (SDF: GR).
PotashCorp believes the proposed transaction would combine two best-in-class companies with minimal overlap to create a global producer in the nutrient industry for the long-term benefit of investors, customers, employees and the communities where both companies operate. The company affirmed that its proposal is not predicated on closing mines, curtailing production, selling the salt business or cutting jobs.
PotashCorp has put forward a compelling proposal to negotiate a transaction that it believes balances the interests of investors and other stakeholders, including the employees and communities in which the companies operate. It is encouraged by K+S' response since many of the matters raised have already been addressed in previous correspondence or can be addressed if K+S were to agree to meet with company representatives.
"We believe that the combination of our two companies would create a well-capitalized, more diversified company across products, geographies, production, distribution and customers," said PotashCorp CEO Jochen Tilk. "We believe this creates greater opportunities and security for all employees. Management and employees of K+S are critical to the future performance of the combined company and we look forward to working collaboratively to address any issues, including safeguarding the interests of employees and communities. We are seeking to meet with K+S management at the earliest possible opportunity so that we can jointly discuss our commitments and further specify the details that would form the basis of a successful combination."
Additional details and intentions regarding social commitments are included in correspondence that PotashCorp previously provided to K+S.
There can be no assurance that any transaction will result from this proposal or, if so, as to the ultimate timing or terms thereof.
PotashCorp is the world's largest integrated fertilizer and related industrial and feed products company by capacity and plays an integral role in global food production. PotashCorp is the world's largest producer, by capacity, of potash and one of the largest producers of nitrogen and phosphate. These three essential nutrients are required to help farmers grow healthier, more abundant crops. With the global population rising and diets improving in developing countries, these nutrients offer a responsible and practical solution to meeting the long-term demand for food. While agriculture is its primary market, the company also produces products for animal feed and industrial uses. Common shares of Potash Corporation of Saskatchewan Inc. are listed on the Toronto Stock Exchange and the New York Stock Exchange.
This release contains "forward-looking statements" (within the meaning of the US Private Securities Litigation Reform Act of 1995) or "forward-looking information"(within the meaning of appropriate Canadian securities legislation) that relate to future events or our future performance. These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical fact. These statements often contain words such as "should," "could," "expect," "may," "anticipate," "believe," "intend," "estimates," "plans" and similar expressions. These statements are based on certain factors and assumptions as set forth in this document, including with respect to: foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities and effective tax rates. While we consider these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward-looking statements are subject to risks and uncertainties that are difficult to predict. The results or events set forth in forward-looking statements may differ materially from actual results or events. Several factors could cause actual results or events to differ materially from those expressed in forward-looking statements including, but not limited to, the following: variations from our assumptions with respect to foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, and effective tax rates; risks and uncertainties associated with the proposed but not completed transaction including the risk that the transaction may not be completed on a timely basis or at all; fluctuations in supply and demand in the fertilizer, sulfur, transportation and petrochemical markets; changes in competitive pressures, including pricing pressures; costs and availability of transportation and distribution for our raw materials and products, including railcars and ocean freight; risks and uncertainties related to operating and workforce changes made in response to our industry and the markets we serve; risks and uncertainties related to our international operations and assets; failure to prevent or respond to a major safety incident; adverse or uncertain economic conditions and changes in credit and financial markets; the results of sales contract negotiations within major markets; economic and political uncertainty around the world; risks associated with natural gas and other hedging activities; changes in capital markets; unexpected or adverse weather conditions; catastrophic events or malicious acts, including terrorism; changes in currency and exchange rates; imprecision in reserve estimates; adverse developments in new and pending legal proceedings or government investigations; our prospects to reinvest capital in strategic opportunities and acquisitions; our ownership of non-controlling equity interests in other companies; the impact of further technological innovation; increases in the price or reduced availability of the raw materials that we use; security risks related to our information technology systems; strikes or other forms of work stoppage or slowdowns; timing and impact of capital expenditures; rates of return on, and the risks associated with, our investments and capital expenditures; changes in, and the effects of, government policies and regulations; certain complications that may arise in our mining process, including water inflows; our ability to attract, retain, develop and engage skilled employees; risks related to reputational loss; earnings; and the decisions of taxing authorities, which could affect our effective tax rates. These risks and uncertainties are discussed in more detail under the headings "Risk Factors" and "Management's Discussion and Analysis of Results and Operations and Financial Condition" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and in other documents and reports subsequently filed by us with the US Securities and Exchange Commission and the Canadian provincial securities commissions. There can be no assurance that the proposed transaction will be completed. Completion of the proposed transaction is subject to a number of risks and uncertainties. Forward-looking statements are given only as of the date hereof and we disclaim any obligation to update or revise any forward-looking statements in this release, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Potash Corporation of Saskatchewan Inc.