25 April 2013 14:13 [Source: ICIS news]
LONDON (ICIS)--PotashCorp has abandoned plans to significantly expand its stake in Tel Aviv-headquartered company Israel Chemicals (ICL) as a result of local and political opposition to the proposal in Israel, the Canada-based fertilizer producer said on Thursday.
The company currently holds a 14% stake in ICL and was looking to expand that to a majority position in the range of 51-100%, according to reports.
Commenting in its first quarter results statement, the company said: “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.
“We have therefore concluded that now is not the time to pursue this opportunity and will focus our energies on other options to maximize shareholder value,” the company added.
Israel’s government, an ICL shareholder, may have had the final say in any bid through its “golden share”, which is a nominal share able to outvote all other shares under certain circumstances.
In a statement released in response to PotashCorp’s announcement, ICL said it had never been in talks about any possible merger: “At no time did ICL receive a proposal or offer regarding a merger transaction, nor was it in any way involved in any discussions with PCS regarding such a transaction.
“ICL believes that global partnerships with strong players, such as PCS, are a welcome strategic alternative for ICL, but that they are only one possible option to ensure the continued growth and success of ICL,” the company added.
Analysts have estimated if PotashCorp were to acquire Israel Chemicals, it could conceivably control 25% of global potash production.
ICL shares were trading down 4.05% as of 13:33 GMT.
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