Israel's Finance Ministry has given its approval in principle to Canada's Potash Corp of Saskatchewan (PCS) to increase its stake in Israel Chemicals, according to Finance Ministry sources Wednesday. The sources said the approval would enable PCS to increase its stake from 13.9% at present to 25%.
PCS is the world's largest potash and fertilizer manufacturer. The increased stake would cost PCS $1.33 billion.
The privately-owned Israel Corp controls a 52.3% majority in Israel Chemicals, which is the country's largest chemical company. It is a leading producer of potash, fertilizers, and industrial chemicals. The remaining stake is controlled by the public through the Tel Aviv Stock Exchange.
A government approval is necessary since the state still has a golden share in the once state-owned company to safeguard its rights over the country's natural resources. Israel Chemicals has a license from the government to mine potash and phosphates.
Israel's Anti-Trust Commission, however, said that it was reviewing the increased stake of PCS in Israel Chemicals regarding its implications. The commission would have final say on the deal.
Last month, Israel Chemicals reported a sharp increase in third quarter revenues and net profits. Revenues rose by 36% to $1.9 billion from $1.39 billion in the corresponding quarter in 2010. Net profits were up 80% to $436 million from $246 million in the same quarter last year.
