The Ministry of Finance continue to oppose the merger of Israel Chemicals Ltd. (TASE: ICL) with Potash Corporation of Saskatchewan Inc. (NYSE; TSX: POT), and despite the storm in the potash market, top ministry officials told "Globes" that there was nothing new under the sun.
"The potash market is very volatile, and it is known that when prices fall, Israel Chemicals' productivity and profits fall," said a top ministry official.
A Ministry of Finance official added that the argument that the market volatility would kill Israel Chemicals was fundamentally flawed. "Factually, the opposite is true, because Israel Chemicals' performance will actually improve in the competitive environment," he said.
Other sources believe that a new situation has arisen, which could put pressure on an Israel Chemicals-Potash Corporation deal, and to abolish the Sheshinksi II Committee. Committee members argue that the government's receipts from Israel Chemicals are low, and should be increased. Israel Chemicals could also become a reserve warehouse for Potash Corporation in the event of a merger, which would not benefit the Israeli economy.
Therefore, the latest events have not yet changed the Ministry of Finance's basic position about a merger.
Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013