Canadian fertilizers giant Potash Corporation of Saskatchewan (TSX: POT; NYSE: POT) (PotashCorp) may have to sell its holding in Israel Chemicals (TASE: ICL: NYSE: ICL) as a condition for approval of its merger with another giant company in the sector, Agrium Inc. (TSX: AGU; NYSE: AGU).
PotashCorp has reported that the regulatory authorities in China and India have informed it and Agrium that PotashCorp will need to sell overseas holdings for the merger to be approved. The all-stock deal, estimated to be worth $25 billion, was announced in September 2016, and is intended to combine the world's largest crop fertilizer production capacity, held by PotashCorp, with the major retail network for agricultural products and services in North America, South America and Australia held by Agrium.
PotashCorp has minority stakes in four overseas companies: Chinese company Sinofert, Chilean company SQM, Jordanian company Arab Potash Company, and Israel Chemicals Limited.
PotashCorp holds a 13.77% stake in Israel Chemicals, worth NIS 2.7 billion.
Neither PotashCorp nor Agrium has any physical presence in India or China, but they have significant sales there and therefore require regulatory approval for their merger, which is due to close in the fourth quarter of this year.
Published by Globes [online], Israel business news - www.globes-online.com - on September 10, 2017
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