Potash Corp. Scraps Proposed Takeover Bid for Israel Chemicals

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, scrapped a proposed takeover bid for Israel Chemicals Ltd. (ICL) after opposition to the deal from workers and Israeli politicians.

“Now is not the time to pursue this opportunity,” Saskatoon, Saskatchewan-based Potash Corp. said today in its first-quarter earnings statement.

“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 takeover would have given Potash Corp. control of the sixth-largest potash producer and boosted its share of forecast global production capacity this year to about 27 percent, according data from fertilizer-industry information service Green Markets. It would also have enabled the Canadian company to vie with Russian competitor OAO Uralkali, which according to data compiled by Bloomberg was the world’s biggest producer in 2011.

Israel’s proximity to Asia would give Potash Corp. an advantage in selling to India, one of the world’s largest importers, John Chu, a Toronto-based analyst at AltaCorp Capital Inc., said in an interview .

Photographer: Geoff Howe/Bloomberg

A mill operations superintendent at the Potash Corp. of Saskatchewan Lanigan mine, inspects potash in a warehouse at the company's facility in Lanigan, Sasketchewan. Close

A mill operations superintendent at the Potash Corp. of Saskatchewan Lanigan mine,... Read More

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Photographer: Geoff Howe/Bloomberg

A mill operations superintendent at the Potash Corp. of Saskatchewan Lanigan mine, inspects potash in a warehouse at the company's facility in Lanigan, Sasketchewan.

Israel Corp., which is controlled by billionaire Idan Ofer, has a 52 percent stake in Tel Aviv-based Israel Chemicals. The Israeli government can block takeover bids for the chemicals company using its so-called golden share.

Potash Corp., Mosaic Co. (MOS) of the U.S. and Calgary-based Agrium Inc. (AGU) own Canpotex Ltd., which sells their potash exports. In a similar arrangement, Belarusian Potash Co. sells exports from Uralkali and Belarus’s Belaruskali. Potash Corp.’s acquisition of Israel Chemicals would have put more than 70 percent of global production capacity in the hands of the two export groups, from about 66 percent now, Chu said.

Potash helps crops withstand drought and strengthens roots. Potash Corp.’s largest potash mines are in the Canadian province of Saskatchewan.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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