By Eyk Henning and Neetha Mahadevan

FRANKFURT--K+S AG on Friday said it rebuffed another unsolicited takeover approach from Canadian rival Potash Corp. of Saskatchewan Inc. that valued the German salt and fertilizer company at roughly EUR7.9 billion ($8.63 billion).

The company said the proposed takeover price was unchanged at EUR41 a share. However, Potash's new overture came with a business combination agreement--more concrete than the initial informal approach--that included commitments on job security and production in Germany. Potash Corp. confirmed it had placed an offer but declined to comment further.

"We are still convinced that the proposed price...does not at all reflect the fundamental value. This is true for our existing business but in particular for the value contribution of our Legacy Project," said K+S's Chief Executive Norbert Steiner. He added that Potash's proposal addressed the interests of K+S workers and local communities but offered "no reliability."

This is the second time this year that K+S has refused an approach from Potash. It rejected the first approach in July, saying the offer undervalued its projects and products, and could compromise jobs.

Analysts have said they consider a price of between EUR45 and EUR55 a share to be fair.

K+S shares rose more than 1% to trading above EUR37 in response to the news.

A combination of K+S and Potash, if successful, would be the largest mining deal since Glencore International PLC's takeover of Xstrata PLC for almost $30 billion in February 2012. Both companies mine potash, a fertilizer, and a tie-up would create a business that could control as much as 30% of the global market.

Bankers and analysts have said that Potash is especially interested in a mine K+S is developing in the western Canadian province of Saskatchewan because it would help the company gain control over production capacities and price power in negotiations with farmers.

Potash Chief Executive Jochen Tilk said in late July he believes a combination with K+S would benefit the companies and that he remains interested in holding talks with K+S management because a merger would "enhance the breadth of each company's respective portfolio, improve cash flow capabilities and provide a more stable operating environment."

Mr. Tilk, a German, added that Potash, would seek a friendly acquisition of K+S and that he was willing to make a binding commitment to ensure that K+S operates as a separate brand and keeps its headquarters in Germany.

He stressed that Potash is committed to building K+S's $4.1 billion potash mine in south Saskatchewan, the first such mine to be built in the Canadian province in 40 years. The Legacy mine is expected to start production late next year and reach full capacity of 2.86 million metric tons by 2023.

Write to Eyk Henning at eyk.henning@wsj.com and Neetha Mahadevan at neetha.mahadevan@wsj.com

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