BHP Billiton launches hostile bid for Potash

On Tuesday, Potash, the world's largest fertiliser producer snubbed BHP's offer, saying it undervalued the firm.

BHP has offered to buy Potash for $130 per share.

Demand for fertiliser is expected to increase this year because of rising demand for meat in emerging markets, as more crops are needed to feed cattle.

The UN's Food and Agriculture Organization (FAO) says demand for meat products in developing countries is being pushed up by rising incomes, population growth and urbanisation.

The FAO has forecast that global annual meat production will expand from 228 million tonnes in 2009 to 463 million tonnes by 2050, with the cattle population estimated to grow from 1.5 billion to 2.6 billion.
Attractive industry

In a statement, BHP said: "The acquisition will accelerate BHP Billiton's entry into the fertiliser industry and is consistent with the company's strategy of becoming a leading global miner of potash."

It added that its offer represented a 20% premium to Potash's closing share price on 11 August, the day before BHP's first approach to the company.