K+S has announced it will sell its Operating Unit Americas, which includes its North and South American salt businesses (containing Morton Salt, K+S Windsor Salt, Morton Bahamas and K+S Salt Latin America). Together, these companies have the largest salt capacity of any business outside CNSIC in China at around 22Mtpy and make products for markets ranging from bulk de-icing to pharmaceuticals. The sale is expected before the end of 2020, but further details are unavailable as yet. In 2019, the Unit had revenues of €1.5Bn (US$1.7Bn) and EBITDA of €230M(US$257M) and its size makes it highly unlikely existing salt companies would be allowed to purchase it on competition grounds. In the recent past, there were indications that the Unit could be listed as a separate company following an initial public offering (IPO) of shares. The sale will enable K+S to reduce its debts.
The sale of Operating Unit Americas is the largest ever in terms of global salt capacity and will create the second biggest salt producer in the world. K+S will retain its European operations that have a capacity of around 10.1Mtpy, the majority of which is for rock salt that is connected to its potash business in Germany.
The effects of the creation of a major new regional salt producer in the Americas are unclear. The new company will inherit the current infrastructure and customers of K+S and may remain unchanged in terms of its component parts and the markets it supplies. An alternative is that it could divest some operations in order to concentrate on more specific markets. The most radical potential action would be to break up the organisation completely and sell its assets on a company or even individual basis. This would probably raise the most capital and enable exiting producers to buy assets without breaking competition laws.
Roskill’s Salt: Outlook to 2028, 18th Edition was published in November 2019. Click here to download the brochure or sample pages for the report or access further information.