UPDATE 4-Potash eyes ICL takeover as a road to China, India

Wed Oct 31, 2012 5:20pm EDT
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* Israel has rejected Potash approaches in the past

* Analysts: Deal unlikely in near term, if at all

* ICL, Israel Corp shares jump; Potash up slightly

By Steven Scheer and Rod Nickel

JERUSALEM/WINNIPEG, Manitoba, Oct 31 (Reuters) - Potash Corp , the world's No. 1 fertilizer producer, is ramping up efforts to buy Israel Chemicals Ltd so it can shore up its leverage with China and India, top consuming countries that are expected to drive much of the industry's growth.

Although a deal is likely a long way off, acquiring ICL , the world's sixth-largest fertilizer producer, would give Canada's Potash Corp better shipping access to China, India and other Asian economies. Rising Asian incomes and populations are expected to trigger greater fertilizer use to produce more food.

Potash Corp confirmed on Wednesday it has been in talks with Israeli officials on acquiring ICL. To get a deal done it would need approvals from Israel's Government Companies Authority, the prime minister and the Antitrust Authority to increase its 13.84 percent stake in ICL. If it does win approval in Israel, it would still likely need further antitrust approvals from a range of global regulators.

"This deal cannot be ruled out. However it is unlikely to happen in the near term," said Virginie Boucher-Ferte, an analyst at Deutsche Bank, in a note to clients.

About 34 percent of ICL, which has a market value of about $15 billion, is traded on the Tel Aviv Stock Exchange and a deal would be the largest foreign takeover of an Israeli company.   Continued...