PotashCorp Eyes Israeli Product

October 31, 2012 05:02 AM

Saskatchewan's PotashCorp is in talks with the Israeli government over a possible merger with Israel Chemical Ltd. The deal would be valued at $13.5 billion and would account for 100 percent of Israel Chemicals.

PotashCorp is the Israeli fertilizer producer's number two shareholder with a 13.84 percent stake behind Tel-Aviv based Israel Corp's 52.3 percent. Executives from the Saskatoon Ag giant have spoken with Prime Minister Benjamin Netanyahu and met with other Israeli officials regarding the possible merger but have seen little movement.

In June PostashCorp made a bid to increase their stake to 25 percent, but progress on that matter ground to a halt and the idea was tabled.

In a statement to Bloomberg, Israel Corp. said, "No deal has been formulated yet, and PotashCorp has not yet approached the company or Israel Corp. There is no certainty negotiations will take place."

Fertilizer manufacturers in Israel and Jordan have come under fire recently, blamed for declining sea levels in the nutrient rich Dead Sea where companies in the area gather their minerals.

Politically, Israel is just a few weeks out from a national election and with public support leaning in favor of conservation and resource management, no official is willing to risk losing the election for the sake of the merger. Given the state's unwillingness to appear unfriendly to the Dead Sea, do not expect talks to progress any time soon.



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