K+S had rejected the offer of 41 euros per share, first made at the end of May, as failing to reflect its fundamental value.
K+S shares were down 23 percent at 23.78 euros as of 9:05 a.m.in Frankfurt trading.
K+S refused takeover bid from PotashCorp in July claiming that the value was too low.
In a press release sent Monday morning, chairman of the board of executive directors for K+S, Norbert Steiner, said the withdrawing creates clarity for the company.
The statement goes on to say K+S expects significant sales and earnings this year despite a current weakness in the potash market.
PotashCorp’s $11.7 billion proposal to acquire its largest European competitor was seen as more attractive after price declines in the Canadian company’s namesake crop nutrient, analysts said last month.
Potash Corp said that since making the offer the potash market had worsened and the average stock price of its potash peers had fallen 40 per cent.
“Nonetheless, in light of the market conditions… and a lack of engagement by K+S management, we have concluded that the pursuit of a business combination with K+S is no longer in the best interest of Potash Corp’s shareholders”, Tilk continued.
The proposal would also have allowed the combined entity and its stakeholders to benefit from diversification across geographies and products.
Lutz Grueten, an analyst at Commerzbank AG said by telephone. Retail investors hold about 30 per cent of the company’s outstanding shares.
Potash Corp meanwhile plans to focus on its growth strategy, according to people familiar with matter who asked not to be identified as the matter remained confidential.