TEL AVIV (Reuters) - Israeli officials plan to meet executives of Canada’s Potash Corp (POT.TO) in the next week before deciding on whether to allow the fertilizer producer’s proposed $13.5 billion takeover of Israel Chemicals (ICL) (ICL.TA) to move forward.
Potash, the world’s No. 1 fertilizer producer, wants to acquire ICL, the world’s sixth-largest fertilizer producer, so it can shore up its leverage with China and India, which are expected to drive much of the industry’s growth.
Israel’s government holds a so-called golden share in ICL so any deal would need approval from the Finance Ministry’s Government Companies Authority, the prime minister and the Antitrust Authority, among others, for the Canadian company to increase its 13.84 percent stake in ICL.
Doron Cohen, the finance ministry’s director-general, said on Tuesday that officials from the Government Companies Authority would meet Potash executives after the Israeli government requested Potash provide more details of its bid.
“The next step is for Potash to provide an explanation and we will decide whether we will continue with the process or not,” Cohen told Reuters on the sidelines of a Finance Ministry conference.
He said the ministry had asked Potash for a broader explanation of its plans and how it would secure Israel’s interests, since ICL produces potash from harvesting the Dead Sea.
Israel is headed for a general election in January so a deal, or even advanced discussions, on the takeover of such a key resources company is seen as unlikely in the near term.
Saskatchewan-based Potash said last week it has been in talks with Israeli officials on acquiring ICL. [ID:nL5E8LV3F0]
Chief executive Bill Doyle met Israeli Prime Minister Benjamin Netanyahu last week to push for a deal.
Conglomerate Israel Corp (ILCO.TA) owns 52.3 percent of ICL and about 34 percent is traded on the Tel Aviv Stock Exchange at a market value of some $15 billion.
Potash sought last year to raise its 13.84 percent stake in ICL to 25 percent but pulled its request when regulators took too long to respond. Cohen said Potash now seeks 100 percent of ICL. (Editing by Susan Fenton)