Politicians slam Potash Corp. bid for Israel Chemicals
‘Deal will result in the destruction of the Negev,’ says Dimona Mayor Bronstein.
The Dead Sea Photo: Ronen Zvulun / Reuters
Politicians from across the political spectrum met for an emergency Knesset
meeting on Wednesday to oppose the interest of Canada’s Potash Corp. to purchase
Israel Chemicals (ICL), one of the country’s largest
Objections to the acquisition centered around concerns that,
should the company be externally controlled, it would choose to downsize its
Israel employees, move operations to the Jordanian side of the Dead Sea where
labor is cheaper, and take Israeli environmental protection off its priorities
Potash, one of Israel’s largest chemical exports, is largely used
The mere calls for a Knesset hearing threw cold water on
On Tuesday, Potash Corp. CFO Wayne Brownlee said in Florida
that “this thing has been put on hold to get through this period of time and to
get through the political events that are happening in Israel,” but freely
admitted that the company was interested in increasing its stake of the company
from its current 14 percent to 51% or more, and ideally full ownership of the
Yesh Atid MK Meir Cohen welcomed the freeze, saying that the
sale would be a “slap in the face” to the entire Negev, where the company
employs some 5,000 workers, accounting for a fifth of the region’s
“Israel Chemicals isn’t a failing company,” he said. “We see no
reason for its sale to a body that controls most potash in the
Dimona Mayor Eli Bronstein agreed. “What will happen here is the
destruction of the Negev,” he said. “The dream of Ben-Gurion and of the State of
Israel will not be [if the sale goes through],” he warned.
Rosenthal noted that average Jordanian potash workers make a fraction of the
earnings of their Israeli counterparts. Therefore, when it comes time to trim
the fat, or seek efficiencies in the company, they would have no reason not to
cut jobs in Israel, he said.
“We’ll have thousands unemployed in Israel,”
Rosenthal also accused the Finance Ministry of lying
about whether any negotiations with Potash took place in the first
Israel Chemicals (ICL) denied any discussions with Potash Corp.
over a possible sale. “To the extent that any dialogue exists regarding the
merger between the companies, it has occurred between the Government of Israel
and Potash Corporation,” a company spokesman said.
“Potash has not turned
to ICL, and ICL is not engaged in any negotiations with Potash Corporation or
any other company regarding this matter.”
Labor MK Avishai Braverman
lamented the situation, saying it was a natural extension of the decision to
privatize the potash supply. “It was a mistake to transfer it to private hands.
These are Israel’s natural resources,” he said. “Natural resources belong to the
citizens of Israel.”
Many of the politicians present in the discussions
praised the multiparty support for blocking the sale, noting that parties with
vastly different economic philosophies, slated to be both within the coalition
and in the opposition, were present at the meeting.
“I’m typically a
capitalist and support [Prime Minister Binyamin] Netanyahu’s policy,” said
Ayelet Shaked of the Bayit Yehudi, adding that the newly-installed Knesset
should gather 40 signatures to force the prime minister to explain how they
would justify supporting such a move.
Likud Beytenu’s Robert Ilatov, the
only representative from the Knesset’s leading party, said it was important to
distinguish between smart and irresponsible ways of bringing foreign investors
to Israel. That said, he opposed the potential acquisition.
Nachman Shai said he could not recall a meeting where all the members so
wholeheartedly agreed. “There’s a broad agreement in this house that we have to
enact a change,” he said.
The hearing also drew representative from small
companies in the employ of Israel Chemicals, worried that a foreign employer
would sack them for unprofitability. “For 17 years we’ve had losses, and nobody
dared send us home,” said Ben Shushan Avi from Magnesium, a plant that employs
450 workers. “If a foreign actor comes and makes American-style decisions,
they’ll close us because we’re not profitable.”
In his Tuesday statements
on the subject, Potash’s Brownlee dismissed the worries. “The opposition that
you are seeing right now is what I would call ‘fear of the unknown.’ We really
have not spent any time yet talking with the stakeholders in Israel,” he
“We feel like we have a very strong proposition for stakeholders,
whether it be employees, people in the community, or governments looking for
revenue,” he continued.
“It really isn’t about production cuts, or
reduced employment, this really is a marketing story, it’s a distribution
logistics story. We think that once we present these credentials we might be in
a better position.”
If the government or the company are not pleased with
the offer, they are free to reject it, he noted. “This is not, and would not, be
a hostile attempt. This would be negotiated and would have to be in the
interests of all stakeholders.”
But Israel Chemicals seems to have not
yet ruled anything out. “In the event that any interested company turns to ICL,
ICL management will act in the best interests of the company, including the
employees of the company, many being residents of the Negev, the communities
which host the company’s sites, the customers, and the company’s small and large
shareholders,” the company said.