26 February 2013 23:56 [Source: ICIS news]
HOUSTON (ICIS)--PotashCorp is looking to grow its global share of the market by acquiring Israel Chemicals, but a combination of political and local opposition within Israel may force company officials to put those plans on hold, an executive said on Tuesday.
Speaking at the Global Metals&Mining conference, Potash Chief Financial Officer Wayne Brownlee said the bid for the Tel Aviv-headquartered chemical producer is on hold.
Although Potash wants to increase its stake from 14%, reportedly between 51 and 100%, the Canadian producer would not take a hostile takeover approach, Brownlee said.
Three years ago, Potash was the subject of a takeover attempt by BHP Billiton, but the sale was halted by the Canadian government.
“The opposition you’re seeing right now is really based on what I would call fear of the unknown," Brownlee said. "We really have not spent any time yet talking with stakeholders in Israel.”
Opponents of the sale to Potash, which include politicians and labour groups, have announced plans to have a conference discussion on Wednesday.
Talks towards the acquisition have been ongoing since November 2012, but the plans have upset local sentiment, as it is felt it would allow the Canadian company to seize control of a vital national asset.
Brownlee said the company is not interested in being a minority shareholder of the Israel producer, which acquires its potash resources from exclusive harvesting within the Dead Sea.
He instead pointed to the fact that for the long-term outlook of the company it is primarily about sourcing a key area of distribution.
Industry analysts estimate that if Potash were to acquire the company, it could conceivably control 25% of the global production, as well as open the door to expanded markets within Europe and Asia.
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