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People walk by the Potash Corp. logo at the entrance of the company's office tower in downtown Saskatoon in this file photo. (Liam Richards For The Globe and Mail)
People walk by the Potash Corp. logo at the entrance of the company's office tower in downtown Saskatoon in this file photo. (Liam Richards For The Globe and Mail)

Potash Corp. still seeks control of Israel Chemicals Add to ...

Potash Corp. of Saskatchewan has not given up on plans to take over Israel Chemicals Ltd., though talks with stakeholders have been on hold as the country faced a parliamentary election in January.

Potash Corp. chief financial officer Wayne Brownlee told a BMO-sponsored Global Metals and Mining Conference in Florida that further delays have occurred as Prime Minister Benjamin Netanyahu works to build a coalition.

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“We’ve been sort of sitting out through an election period,” Mr. Brownlee told the conference. “There’s been some encouragement to look at the transaction.”

Potash Corp., the world’s largest potash producer, holds a 14-per-cent stake in ICL, a $16.4-billion company and one of the few major producers of the crop nutrient that is not a member of two global marketing groups that control most of the market.

It has been in talks with the Israeli government since November to raise the size of that stake, ruffling some feathers because it would mean putting a key state asset into the hands of the Canadian fertilizer giant even as it targets massive, organic growth.

Mr. Brownlee said on Tuesday that any increment in its ownership would have to give it a majority stake in the company, a major supplier into the European market where Potash Corp. does not have a presence.

Cognizant of political sensitivities, he said the company had no plans to make a hostile bid for ICL, and outlined reasons why stakeholders should consider a deal.

“It really isn’t about production cuts,” he said. “It’s not about reduced employment. This really is a marketing story, it’s a distribution and logistics story and we think that once we present those credentials we might be in a better position.”

Any deal would require the approval of Israel’s government, which holds a golden share in ICL, a company that holds exclusive mining rights to the Dead Sea.

Having survived a hostile takeover attempt itself just three years ago – when the Canadian government stopped an unsolicited bid from BHP Billiton Ltd. – Potash Corp. knows to tread carefully through political waters in Israel.

“This is not and would not be a hostile attempt. This would be a negotiated deal which would have to be in the interest of all stakeholders ,” said Mr. Brownlee.

Most of the world’s potash supply is in the hands of Canpotex, the international marketing arm of producers that include Potash Corp., Mosaic Co. and Agrium Inc., or Canpotex’s Russian counterpart Belarus Potash Co., the trading joint venture of Uralkali and Belaruskali.

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