Canada's Potash drops Israel Chemicals bid

Potash Corp. abandons bid to acquire Israeli chemical giant after two months of vocal opposition from Israeli politicians.

The Dead Sea 370 (photo credit: Ronen Zvulun / Reuters)
The Dead Sea 370
(photo credit: Ronen Zvulun / Reuters)
Following two months of vocal opposition from Israeli politicians, Canada’s Potash Corp. on Thursday dropped efforts to acquire Israel Chemicals (ICL), the country’s second-largest publicly traded company.
“Over recent months, we have been exploring the possibility of expanding our ownership interests in ICL.
While we continue to believe that such a transaction would be of tremendous benefit to stakeholders of both companies and the State of Israel, there must be receptivity to foreign investment and certainty in the rules that govern such investment,” the company wrote in its first quarter statement, released Thursday.
“We have therefore concluded that now is not the time to pursue this opportunity and will focus our energies on other options to maximize shareholder value.”
In response to the announcement, Israel Chemicals said that it had never entered formal negotiations with Potash over a merger.
“No actor turned to ICL with a merger proposal and ICL was not involved in any discussions about it,” the company said.
“International partnerships with major players such as Canada’s Potash are an appropriate alternative, but certainly not the only alternative for ICL’s growth,” it added.
Had Potash, which already owns a 14 percent stake in Israel Chemicals, come to control the company, it would have become the world’s largest potash company.
Israel Chemicals stock dropped 4% on the announcement.
Earlier in the month, Finance Minister Yair Lapid came out against the deal, saying, “Israel’s natural resources are a public asset, and the Israeli public should be the first to benefit from them.”
On several occasions, Lapid has stated that helping the public reap the benefits of Israel’s natural resources is a priority for him, hinting that he may reexamine taxation policy on resources such as potash.
Lapid’s predecessor Yuval Steinitz had also supported the possibility that the government would nix the deal, saying, “The State of Israel, which has a golden share [of potash], doesn’t need to agree to a deal that might endanger or harm the Israeli economy.”
In February, politicians called an emergency Knesset meeting to head off the possibility of a merger or acquisition.
They cited fears that the foreign company, which also owns operations in Jordan, would simply move its activities out of Israel and across the border, taking thousands of jobs with it.
At the time, Yesh Atid MK Meir Cohen called the potential sale “a slap in the face” to the entire Negev, where the company employs approximately 5,000 workers, accounting for a fifth of the region’s output.