PotashCorp Seeks to Acquire Israel Chemicals Ltd.

Nov 06, 2012

Canadian Fertilizer Giant Makes a Bid to Buy Israeli Chemical Company

The world’s No.1 fertilizer company– PotashCorp based in Saskatchewan, Canada moves to acquire Israel Chemicals Ltd. (ICL) which is currently ranked as the sixth largest fertilizer company worldwide. Israeli government officials will be meeting with PotashCorp executives this week to go over the bid. The political implications of the acquisition are significant. Currently, ICL has exclusive mining rights to the Dead Sea and the bid comes at a time when Israel is heading into a general election in January.

PotashCorp based in Saskatchewan, Canada is laying out the ground work to tap into the European, India and Chinese markets with the possible takeover of Israel Chemicals Ltd. (ICL). The merger talks are happening this week between PotashCorp executives and the Israeli government, which include Israeli Prime Minister Benjamin Netanyahu.

The Israeli government holds the golden share of ICL, which also just so happens to hold exclusive mining rights to the Dead Sea. If the Israeli government accepts the bid, it would put state assets into the hands of a foreign company at a time when political tensions are high with the Israeli general election looming in January. If the government supports the bid, it would be the biggest foreign takeover of an Israeli company to date.

The bid is a strategic move for PotashCorp, as acquiring ICL would provide it access to key emerging markets, such as Europe, China and India. PotashCorp already owns a 14 per cent stake in the $16.4 billion company – with the initial investment made in 1998. The ICL produces potash, phosphate fertilizers, phosphoric acid, feed additives, flame retardants and products for food, hygiene and pharmaceutical industries.

PotashCorp reported a 22 per cent drop in third-quarter profit last week, which has been partly attributed to stalled contract talks between Canpotex with China and India. PotashCorp partially owns Canpotex.

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