Business Day

ICL favours merger with Potash

- DAVID WAINER and ELLIOTT GOTKINE Tel Aviv

ISRAEL Chemicals (ICL), the fertiliser producer that Potash Corporatio­n of Saskatchew­an is seeking to acquire, said yesterday it would benefit from a merger.

ISRAEL Chemicals (ICL), the fertiliser producer that Potash Corporatio­n of Saskatchew­an is seeking to acquire, said yesterday it would benefit from a merger.

“Merging Israel Chemicals with a big, strong global partner is a good idea,” CEO Stefan Borgas said at the Tel Aviv Stock Exchange. Such a deal “really depends on the details”.

“We’ve heard nothing about this because there are simply no talks. These are ideas that are floating around.”

The proposed acquisitio­n by Canada’s Potash of Israel Chemicals, the country’s second-largest publicly traded company, would create the world’s biggest producer of potash, a nutrient that helps crops to withstand drought and strengthen­s plant root systems. It would also be the biggest Middle Eastern takeover, according to data.

Canadian Foreign Affairs Minister John Baird on Tuesday met separately with Israeli Prime Minister Benjamin Netanyahu and

It depends on the details. We’ve heard nothing about this because there are simply no talks. These are ideas that are floating around

Finance Minister Yair Lapid. Mr Baird also met with Israel Corp chairman Amir Elstein, newspaper Calcalist reported. Israel Corp holds a 52% stake in Israel Chemicals and Potash has 14%, according to data.

“I think for the state of Israel, for the economy of Israel, being part of a conglomera­te in the world of giants is a must,” Nir Gilad, Israel Corp’s CEO, said in a separate interview at the exchange.

Israeli public figures have expressed opposition to the deal and the government, which holds a “golden” share in Israel Chemicals, will need to approve the merger. Mr Lapid, head of Israel’s secondbigg­est party Yesh Atid, has criticised the transactio­n for its potential to harm the Negev region.

Israel Chemicals employees have threatened to strike if talks with the newly formed government over a deal are revived.

A sale of Israel Chemicals may generate a gain of about 15 times for Israel Corp, controlled by billionair­e Idan Ofer.

In 1997, as Israel Corp was building its stake in the fertiliser producer, it paid the Israeli government 667-million shekels ($184m) to raise its holding in Israel Chemicals to 42% from 25%. That additional stake is now valued at about 10.3-billion shekels.

Mr Ofer owns 46% of Israel Corp and was chairman of the investment company until 2010.

A delisting of Israel Chemicals following a combinatio­n with Potash would be of “tremendous detriment” to the Tel Aviv Stock Exchange, said Ester Levanon, CEO of Tase. Ms Levanon suggested a “partial merger” to keep Israel Chemicals listed, or a Potash listing in Tel Aviv.

Potash is preparing concession­s ranging from job guarantees to a local stock-market listing to allay concerns that a deal would harm Israeli national interests, a source said last month. Bloomberg

Newspapers in English

Newspapers from South Africa