TEL AVIV (Reuters) - A possible acquisition of Israel Chemicals (ICL) (ICL.TA) by Canada’s Potash Corp (POT.TO) is not currently under consideration due to the Finance Ministry’s “professional reservation”.
“The Israeli government, which holds a golden share in Israel Chemicals, will not allow any deal that endangers or hurts the economic and environmental interests of the state of Israel and its citizens,” the ministry said in a statement on Thursday.
Potash Corp, the world’s No 1 fertilizer producer, confirmed on Wednesday it has been in talks with Israeli officials on acquiring ICL. To get a deal done it would need approvals from the Finance Ministry’s Government Companies Authority, the prime minister and the Antitrust Authority to increase its 13.84 percent stake in ICL.
Potash Corp is seeking to buy ICL to shore up its leverage with China and India, top consuming countries that are expected to drive much of the industry’s growth.
Acquiring ICL, the world’s sixth-largest fertilizer producer, would give Canada’s Potash Corp better shipping access to China, India and other Asian economies. Rising Asian incomes and populations are expected to trigger greater fertilizer use to produce more food.
Conglomerate Israel Corp (ILCO.TA), which owns a majority in ICL, said on Wednesday Potash Corp Chief Executive Bill Doyle has met Israeli Prime Minister Benjamin Netanyahu to push for a deal, while Israeli media reported that Netanyahu instructed his staff and the Finance Ministry to examine it.
“The subject of a possible merger between Israel Chemicals and Canada’s Potash is not currently being considered as there is a professional reservation by the Finance Ministry,” the ministry’s statement said.
ICL has potash and phosphate mining rights on Israeli state-owned land, including at the Dead Sea, whose water level has been shrinking steadily for years.
Officials at Potash Corp and Israel Corp declined to comment.
About 34 percent of ICL, which has a market value of nearly $16 billion, is traded on the Tel Aviv Stock Exchange and a deal would be the largest foreign takeover of an Israeli company.
With Israel headed for elections in January, any discussions regarding Israel Chemicals would likely be on hold in any case. Moreover, it is not clear who will head the Finance Ministry after the election.
Reporting by Tova Cohen and Steven Scheer; Additional reporting by Rod Nickel