KPLUF K Plus S AG (QX)

By Joanne Chiu 

Potash Corporation of Saskatchewan Inc. has dropped a takeover bid for rival K+S AG, citing challenging market conditions and a lack of engagement by K+S management.

The Canadian company, which is the world's largest integrated fertilizer and related industrial and feed products company by capacity, this year offered EUR41 ($45.98) a share for the German salt and fertilizer company, valuing K+S at EUR7.9 billion ($8.8 billion).

In August, K+S said Potash Corp.'s offer undervalued the company and its projects. K+S also said that a takeover could cost jobs, a warning that won management both labor and political support, if not the backing of shareholders.

In September one of K+S's investors, Deutsche Bank Asset & Wealth Management, said the company was obliged to consider the offer from Potash Corp., and expressed doubt about K+S's stand-alone strategy given shifts in global supply and demand. However K+S remained opposed to the deal.

Potash Corp.'s withdrawal comes amid challenging macroeconomic conditions that have sent global potash-related commodity stocks sinking almost 40%. "In light of these market conditions and a lack of engagement by K+S management, we have concluded that continued pursuit of a combination is no longer in the best interests of our shareholders, " said Potash Corp. President and CEO Jochen Tilk.

Shares K+S plunged early Monday in response to the news, dropping 24% shortly after the open. At 0715 GMT they were trading down 22% at EUR24.04.

Monica Houston-Waesch contributed to this article.

Write to Joanne Chiu at joanne.chiu@wsj.com

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(END) Dow Jones Newswires

October 05, 2015 04:04 ET (08:04 GMT)

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