7.5c SP -> $1.11 SP Target (Largest Potash Deposit in West-Europe) $30M MC, page-404

• Great question, Ill lay out the macro M&A environment for potash for the past decade to show what the potential for M&A takeover is:

BHP:

• In 2010, BHP bid US$40 BILLION for the largest potash producer IN THE WORLD, PotashCorp in Canada.

• The Canadian government prevented the takeover from occurring, stating that it wasn't "for the betterment of the Canadian people"

• BHP then decided to settle for Jansen, for $350M Canadian.
• To say that they wanted to become a Global Potash Powerhouse a decade ago was an understatement - they literally wanted to takeover the world leader and gain the largest slice of market share possible in one swoop.
• People have argued that they have changed their tune, and that they are "happy" with Jansen and Jansen alone. I strongly disagree, you dont bid US$40 BILLION for the biggest potash company on Earth in such a major play in a future facing commodity and then be happy to acquire very early stage project and sit still.
• I personally believe that BHP will acquire SHP following the proving up of resources and the go ahead from the community and government come mine permitting time. They wont say no to such a KEY JURISDICTION THAT JANSEN DOESNT REACH, the European market.
• They will then control some of the NA potash market, and have control of the largest potash deposit in Europe. That seems to make most sense as there would be close to zero customer jurisdiction overlap, greatly enlarging their footprint in the potash market

If they paid $350M for 5.3B tonne Jansen in 2010, what would they pay for 5.3B t (possibly 8-9B t SHP with Grafentonna project) in 2021/2022?

With all permits, defined and upgraded resource, my bet would be $750M - $1B due to its proximity to key markets, low logistics emissions, empty underground workings where tailings can be dumped so is to limit environmental impact.

They would then be able to bank roll the project with a far, far cheaper WACC. Take a foothold in Europe and reignite their 2010 desires of control over the Potash market.

BHP and SHP, match made in heaven?

I know Merchant have spoken briefly about this potential, alongside Warwick Grigor from Far East capital, claiming, why would they go for Jansen, when SHP have a similar asset in better jurisdiction?

I respond, why not both? I think we will see BHP reignite this M&A hunger into the 2020's.

Hope that helps.

DYOR, not financial advice.