Canada's Potash Corporation of Saskatchewan Inc. (NYSE; TSX: POT) is seeking to merge with Israel Chemicals Ltd. (TASE: ICL), in which it holds a 13.84% stake.
In a statement to the TASE today, Israel Chemicals controlling shareholder, Israel Corporation (TASE: ILCO) said, "The company confirms that it is aware that Canada's Potash Corporation is in contact with various government authorities, and has even met with the Israeli prime minister, about a possible merger of Israel Chemicals with Potash. Top company executives are present at Potash's meetings with the Israeli government."
"No deal has been formulated, and no business approach has been made by Potash to Israel Chemicals. There is no assurance that business negotiations will begin between the company and Potash, no assurance that a deal will be reached, or that the parties will sign an agreement, and no assurance that an agreement, if reached, will be closed."
Israel Corporation, controlled by Idan Ofer through Ofer Holdings Group, owns 52.3% of Israel Chemicals.
Potash Corporation president and CEO William Doyle recently visited Israel, and met Prime Minister Benjamin Netanyahu about a merger.
There were reports in December 2011 that Potash Corporation was trying to obtain permission from the Ministry of Finance to increase its stake in Israel Chemicals to 25%. Under the terms set by the government, as part of its golden share in Israel Chemicals, Potash Corporation must obtain permission to increase its stake in Israel Chemicals.
Potash Corporation is the world's largest potash producer, and controls a fifth of the market. Israel Chemicals is one of its competitors. A merger of the two companies would make Idan Ofer the largest shareholder in Potash Corporation.
Published by Globes [online], Israel business news - www.globes-online.com - on October 31, 2012
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