A takeover tussle between two of the world’s biggest potash players could have an unlikely winner: BHP Billiton.
Analysts say a deal between Canada’s Potash Corp and Germany’s K+S will mean the remaining players in the market have increased pricing power over the next decade.
BHP has its foot on a potash megaproject called Jansen in Canada, which CEO Andrew Mackenzie has said is the best potash asset in the world.
But BHP is yet to decide whether to develop it could hinge the success of exploration and acquisitions in its other two key growth commodities: oil and copper.
Mr Mackenzie told The Australian Financial Review this month that BHP may have to choose between copper, potash and conventional oil in about five years, and could take on partners or exit one of the plays to protect its progressive dividend.
Deutsche mining analyst Paul Young said a Potash Corp deal with K+S would probably be positive for BHP.