BHP goes hostile with £25bn bid for Potash

London-based BHP, which employs 41,000 people and has operations in 25 countries, made the offer direct to shareholders after directors of PotashCorp dismissed an initial approach as being "wholly inadequate".

BHP is a market leader in the production of coal, copper and iron ore and is betting that demand for agricultural fertiliser ingredients will rise as the developing world requires more meat and plants.

Chief executive Marius Kloppers described the move for Canada-based Potash as an exciting opportunity to acquire a portfolio of market-leading assets.

He added: "It accelerates our stated strategy of becoming a leading global potash producer and further diversifies our portfolio by commodity, geography and customer."

Potash said on Tuesday night that BHP's approach offered a 16 per cent premium on its closing price on Monday night and represented an attempt to acquire the company for significantly less than its intrinsic value.

Chief executive Bill Doyle added: "Global demand for food is steadily increasing, creating an attractive operating environment for the entire fertiliser industry and, with our premier position, PotashCorp is uniquely poised to benefit."