Israel Chemicals Offers $109 Million for Allana Potash

ICL hopes completing its acquisition of the Canadian company will expedite development of Ethiopian muriate mine.

Send in e-mailSend in e-mail
Israel Chemicals' Dead Sea Works potash plant in Sodom, October 2013.
Israel Chemicals' Dead Sea Works potash plant in Sodom, October 2013.Credit: Reuters

Israel Chemicals said on Friday it had made a $137 million Canadian dollars ($109.5 million) offer to buy Canada’s Allana Potash, a deal it hopes will accelerate development of a mine in Ethiopia. ICL already owns 16.36% of Allana, whose Danakhil project in northeast Ethiopia could yield up to 1 million tons of muriate, the commodity form of potash, per year for 25 years. It will pay 50 Canadian cents per share for the remaining shares. The offer is a 51.5% premium to Allana’s closing price on Thursday, prior to the offer being announced.

On Friday, Allana shares jumped 44% to 47.5 Canadian cents in Toronto. ICL shares edged 0.43% higher in New York for the day.

The acquisition, to be paid for in cash and shares in ICL’s common stock, is supported by Allana’s board of directors, but is still subject to conditions and regulations, ICL said. A takeover by ICL, the world’s sixth-biggest potash producer, would push the mine closer to construction and give ICL a future low-cost source of the fertilizer. The mine is small compared to those operated by top producers Uralkali and Potash Corp of Saskatchewan, but would add to a global capacity glut.

“Acquiring ownership of Allana will enable ICL to control the development of the Danakhil project, accelerate pre-construction engineering design work, as well as secure project financing,” ICL said in a statement.

Along with muriate of potash, Allana is studying potential for producing the premium product sulfate of potash at the site. Norwegian fertilizer giant Yara International is developing an adjacent SOP project, and Allana CEO Farhad Abasov said this month that he planned to talk with Yara about a partnership

Yara spokesman Bernhard Mauritz Stormyr declined comment on ICL’s offer to Allana, but the Canadian company said it has granted ICL a right to match any competing offer. It’s unlikely that another bid will emerge, and the offer is likely the best option for Allana given challenging conditions for junior potash companies, Raymond James analyst Steve Hansen said in a note. The deal must close by August 17.

ICL is the second-largest Israeli company on the Tel Aviv Stock Exchange and one of the three largest suppliers of the crop nutrient potash to China, India and Europe.

Click the alert icon to follow topics:



Automatic approval of subscriber comments.

Subscribe today and save 40%

Already signed up? LOG IN


Palestinians search through the rubble of a building in which Khaled Mansour, a top Islamic Jihad militant was killed following an Israeli airstrike in Rafah, southern Gaza strip, on Sunday.

Gazans Are Tired of Pointless Wars and Destruction, and Hamas Listens to Them

Trump and Netanyahu at the White House in Washington, in 2020.

Three Years Later, Israelis Find Out What Trump Really Thought of Netanyahu

German soldier.

The Rival Jewish Spies Who Almost Changed the Course of WWII

Rio. Not all Jewish men wear black hats.

What Does a Jew Look Like? The Brits Don't Seem to Know

Galon. “I’m coming to accomplish a specific mission: to increase Meretz’s strength and ensure that the party will not tread water around the electoral threshold. If Meretz will be large enough, it will be the basis for a Jewish-Arab partnership.” Daniel Tchetchik

'I Have No Illusions About Ending the Occupation, but the Government Needs the Left'

Soldiers using warfare devices made by the Israeli defense electronics company Elbit Systems.

Russia-Ukraine War Catapults Israeli Arms Industry to Global Stage