Israel Chemicals Sale May Be Blocked by Coalition Deal-MakingCalev Ben-David and Shoshanna Solomon
Opposition from Israel’s second-biggest political party may stymie the proposed sale of Israel Chemicals Ltd. to Potash Corp. of Saskatchewan Inc., as the Yesh Atid faction negotiates to join the next government.
ICL, which mines potash from the Dead Sea, is Israel’s second-largest company by market value. The state holds a so-called golden share in ICL, allowing it to block a takeover.
Yesh Atid, which has spoken out against an ICL sale, emerged from the Jan. 22 election with 19 of the 120 seats in parliament, trailing only Prime Minister Benjamin Netanyahu’s Likud-Beitenu electoral slate, which won 31 seats. Netanyahu and Yesh Atid leader Yair Lapid are expected to meet today to negotiate a coalition agreement, Israel Radio said. The prime minister has until March 16 to form a new government.
The Calcalist financial daily said today that Yesh Atid is making opposition to ICL’s sale a condition for joining a Netanyahu-led government. Yesh Atid spokesman Tomer Cohen declined to comment on the Calcalist report.
“The opposition to the deal transcends the political divide in Israel, and Yesh Atid’s opposition is another indication that the chances of this deal actually happening are very slim,” Gilad Alper, a senior analyst at Excellence Nessuah Investment House Ltd. in Ramat Gan, said today by phone.
ICL shares rose 0.5 percent at 1:30 p.m. in Tel Aviv. Israel Corp., the company controlled by the Ofer family that owns 52 percent of ICL, fell 0.2 percent.
Spearheading opposition to an ICL deal in Yesh Atid, which campaigned as a champion of Israeli middle-class concerns, is Meir Cohen, number four on its parliamentary list and mayor of the southern town of Dimona. Many Dimona residents are employed by ICL at its nearby Dead Sea works.
“The sale of ICL to a foreign company would be abandoning residents of the Negev region and a slap in the face of every citizen of Israel,” Cohen said at a Knesset meeting on the ICL sale on Feb. 27. He will be taking part in a demonstration today in Dimona against the sale.
Lapid has also spoken out on the issue. “It will hurt thousands of residents in the south, it will lead to the loss of jobs, and is not Zionist,” Lapid wrote on his Facebook page last week.
Potash Corp. Chief Financial Officer Wayne Brownlee referred last month to “political events” complicating the transaction. He later said the Canadian company is still interested in acquiring ICL. “We need to make sure that we have a good package that addresses” Israeli concerns over jobs, Brownlee said.
A takeover would lift Potash Corp.’s share of forecast global potash production capacity in 2013 to 27 percent, according to data compiled by Green Markets, a fertilizer-industry information service.
Israel Corp. Chief Executive Officer Nir Gilad defended a sale to Potash today.
“Headlines and populism don’t alter the underlying data - such a connection would also be strategic for the state of Israel, for employees and managers, and certainly for Israeli society,” Calcalist quoted him as saying in an interview. “The fact is, we are waiting like everyone else for the Canadians and a new government to formulate a position.”