K+S Sells Americas Salt to Stone Canyon
On the same day it confirmed market rumors about negotiating the sale of its American salt business, German potash and salt producer K+S signed the contract with Stone Canyon Industries Holdings (SCIH), subsidiary Kissner Group Holdings minority owner and CEO Mark Demetree and affiliates.
The sale price, as previously anticipated, is $3.2 billion, to be paid in cash upon closure, which is expected in the summer of 2021, subject to the usual conditions and antitrust approvals.
“We look forward to the addition of the K+S Americas salt business to SCIH,” said James Fordyce, co-CEO of SCIH. “With its iconic Morton Salt brand and other industry leading products and solutions, the combination of the Americas salt business with SCIH’s Kissner Group Holdings allows us to expand our product offerings to consumers along with our existing government and commercial customers. The Americas salt business adds an integral component to SCIH’s long-term, growth-oriented business model.”
K+S said the sale is an important milestone in strengthening the company’s financial base and reducing debt by significantly more than €2 billion by the end of 2021.
The company added that it continues to be well on track in realizing synergies and reducing costs in production, logistics, purchasing, sales and marketing. Moreover, K+S aims to generate a positive free cash flow at all German production sites even with a low global price level for potash as well as weak demand for de-icing salt as a result of weather conditions. Consequently, it is further optimizing its cost and capital expenditure structure at all of its production sites.
In addition, the Kassel-based player is currently restructuring its remaining administrative functions in Germany by merging its Europe+ operating unit and the K+S holding entity to form a leaner and more efficient organization. The measures, expected to be completed by the end of this year, will reduce the new structure’s administrative budget by 30% for an annual total of about €60 million.
Author: Elaine Burridge, Freelance Journalist
