Potash Corporation of Saskatchewan Inc. (NYSE; TSX: POT) has given up on acquiring Israel Chemicals Ltd. (TASE: ICL), at least for now.
Earlier this month, new Minister of Finance Yair Lapid came out against the sale, which effectively ended any chance of a deal.
In the press release on the company's financial report for the first quarter of 2013, Potash Corporation states, "Over recent months, we have been exploring the possibility of expanding our ownership interests in Israel Chemicals. 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."
Israel Chemicals said in response, "At no time did Israel Chemicals receive a proposal or offer regarding a merger transaction, nor was it in any way involved in any discussions with Potash Corporation regarding such a transaction. Israel Chemicals believes that global partnerships with strong players, such as Potash Corporation, are a welcome strategic alternative for Israel Chemicals, but that they are only one possible option to ensure the continued growth and success of Israel Chemicals."
It added, "Israel Chemicals is a strong company with an attractive future in all its businesses, including fertilizers. In the potash market, Israel Chemicals is a medium size, low cost producer, and by no means dependent on other players in the market. Each of Israel Chemicals’ three production sites are globally competitive and have attractive growth potential."
A source in Israel close to the proposed deal said, "The atmosphere in Israel rejects foreign investors. There is hostility towards tycoons, especially those profiting from natural resorces."
Published by Globes [online], Israel business news - www.globes-online.com - on April 25, 2013
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