Potash Corp wants to buy ICL despite obstacles

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

Canadian fertilizer producer Potash Corp of Saskatchewan says it is determined to buy most, if not all, of ICL Israel Chemicals Ltd and that stiff local opposition to such a takeover is based on unfounded fears.

Potash, the world's largest producer by capacity of its namesake crop nutrient, is aiming to boost its 14 percent stake in ICL Israel Chemicals, the world's sixth-largest potash producer, to at least 51 percent and preferably 100 percent.

"The opposition you're seeing now is fear of the unknown," Potash Corp Chief Financial Officer Wayne Brownlee said on Tuesday in remarks at BMO Capital Markets Global Metals and Mining conference in Hollywood, Florida, that were distributed via webcast.

The largest shareholder in ICL is the conglomerate Israel Corp Ltd, which owns more than 52 percent, according to Thomson Reuters data. The Israeli government holds a golden share in ICL Israel Chemicals, giving it the authority to decide on any takeover move on the company.

A spokesman for Israel Corp said there are no talks between the companies currently because Potash Corp must first secure approval from the government. Prime Minister Benjamin Netanyahu is trying to assemble a coalition government after January's general election.

Brownlee said Saskatoon, Saskatchewan-based Potash Corp has not been talking with stakeholders in ICL recently because of the election.

Workers at Israel Chemicals have said they would hold protests in coming weeks to try to prevent a deal, which they fear will lead to layoffs.

Addressing those concerns on Tuesday, Brownlee said Potash Corp is not interested in cutting production or employment levels at ICL. He said its rationale is to become the "lowest cost provider" of potash "to anywhere in the world".

Potash Corp does not want just to increase its stake in ICL and remain a passive investor, Brownlee said.

Buying ICL, which has a market cap of nearly $17 billion, would represent the largest foreign takeover of an Israeli company.

Shares of Potash Corp were up slightly in morning trading in New York and Toronto. ICL shares dropped 2.5 percent in Tel Aviv.

Focus on Volume 

Brownlee also said that Potash Corp's focus in general for the next five years will be on building up potash sales volume.

"Right now the message is we're really seeking volume growth as opposed to seeing price growth," Brownlee said. "That's our key objective at this stage."

Canpotex Ltd, the offshore selling agency for Western Canadian potash producers Potash Corp, Mosaic Co and Agrium Inc, has long used its bargaining clout to drive the highest price, and Potash Corp regularly idles its mines in times of high supply or lower demand.

But key importers China and India bruised the earnings of potash producers in the second half of 2012 by staying out of the market altogether.

There also may be stiff competition coming from new potash mines under construction in Western Canada by Germany's K+S AG and BHP Billiton Plc, although BHP has not yet given final approval to its project. To head off new competitors, analysts have mused about the possible merits of Canpotex switching to a volume emphasis.

Potash Corp spokesman Bill Johnson said Brownlee's comments do not suggest a change in strategy as the company will continue to match supply to demand. But he said the company has noted that volume growth has been flat for five or six years and wants to change that trend, with the company expanding its mines and demand rising.

Mosaic Chief Executive Jim Prokopanko, speaking at the same conference, said demand from India has been picking up lately, and Canpotex could sell more than the 1.1 million tonnes of potash in 2013 that its latest supply contract with India calls for.

Prev 1 2 Next All

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left


Meridian’s conveyors deliver seed with unmatched versatility. Meridian’s transport conveyors are manufactured with heavy-duty, fully enclosed construction. Meridian’s cross cleated ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form