02 April 2009 19:42 [Source: ICIS news]
“I am stunned by it [the price], and the low acquisition multiple,” said Wolfgang Fickus, analyst at Germany's WestLB bank, regarding the $1.675bn (€1.27bn) acquisition.
Fickus and other analysts questioned K+S CEO Norbert Steiner in a webcast conference call on K+S' deal to acquire Morton from Dow Chemical.
Fickus pointed to synergies from the Morton deal, which K+S had not even included in its evaluation of Morton.
He also compared the price with the estimated $2.4bn K+S would have had to pay for Compass Minerals, a similarly-sized US salt firm K+S was reportedly interested in acquiring before it shelved those plans last month, and he compared it with the price it paid for a salt business in Chile in 2006.
Steiner, in response, gave an audible sigh and then said: “That’s a good question. Part of your question you would have to address to [Dow CEO] Andrew Liveris, because it was their decision to choose K+S as the preferred bidder in the last couple of days.”
“But I think it is a fair deal,” he added.
Steiner declined a direct comment. But he said K+S had expected Morton to be sold even when it was still with Rohm and Haas. He would not confirm if there had been earlier talks with Rohm’s management about Morton.
In spite of the size of the deal, Steiner said that even after the Morton acquisition K+S remained financially strong to expand its potash fertiliser business, make further acquisitions, and to invest in environmental protection measures at its sites in ?xml:namespace>
With Morton under its belt, Kassel-based K+S - already the largest salt producer in Europe and South America - would now become the leader in
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