June 28 (Reuters) - Potash Corp of Saskatchewan Inc , the world's largest fertilizer company by capacity, does not plan any closures at K+S AG if its bid for its German peer proves successful, according to people familiar with the matter. Potash Corp and K+S have both acknowledged the bid publicly but have disclosed no other details. Sources told Reuters last week that K+S is concerned that Potash Corp wants to take capacity out of an oversupplied market in order to boost profitability. Potash Corp, however, intends to keep K+S's German mines operational, would not divest its market-leading salt business, and would continue with the development of a $4 billion legacy mining project in Canada, the people said on Sunday. Potash Corp also views K+S's assets as complementary, with the latter's specialty business that commands high prices diversifying Potash Corp's more commoditized potash, nitrogen and phosphate business, the people said. It also sees the stable, strong cash flow of K+S's salt business as attractive, the people added. Friendly talks between Potash Corp and K+S started last year, the people said. The chief executives of the two companies met in February to discuss a merger, with Potash CEO Jochen Tilk arguing that a full combination was the most attractive opportunity, according to the sources. Potash Corp submitted a written acquisition proposal to K+S at the end of May, the people added. Since then, however, K+S has refused to engage in negotiations with Potash Corp, without communicating a reason, the people said. This is despite Potash Corp's assurances that any deal would not be based on labor and other cost savings, and that K+S's management would be offered important roles in the combined company, the people added. Potash Corp also sees a strong fit between its business in the United States and K+S's footprint in Europe, the people said. It expects to maintain K+S's headquarters in Kassel, Germany, as the combined company's European headquarters, they added. The sources asked not to be identified because the deliberations are confidential. Potash Corp and K+S declined to comment. Potash Corp has offered to pay around 41 euros per K+S share, valuing the company at close to 8 billion euros ($8.9 billion), a person familiar with the matter told Reuters on Friday. This would amount to a 57 percent premium to the average price of K+S for the 12 months prior to news of Potash Corp's offer emerging. (Reporting by Greg Roumeliotis in New York and Patricia Weiss in Frankfurt; Editing by Matthew Lewis)
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