TEL AVIV, Israel, March 30, 2015 /PRNewswire/ --
ICL (NYSE and TASE: ICL), a global manufacturer of products that fulfill essential needs in the agriculture, processed food and engineered materials markets, today announced that it entered into an arrangement agreement with Allana Potash Corp., a company that focuses on the acquisition and development of potash assets and whose shares are traded on the Toronto Stock Exchange (TSX: AAA), to acquire all the common shares of Allana. ICL currently holds 16.36% of Allana's shares which it acquired in 2014, and has offered to acquire all of the other outstanding common shares of Allana. The consideration offered to Allana shareholders is C$.50 per share, or approximately C$137 million, and will be paid by ICL in cash and shares of ICL's common stock. The transaction is supported by Allana's Board of Directors, and will be undertaken by way of a plan of arrangement under Canadian law. The transaction is subject to certain customary conditions, including among others, applicable regulatory approvals.
ICL's original purchase of common shares in Allana derived from an alliance agreement between ICL and Allana in 2014 that included an off-take agreement in which ICL received the right to purchase and market one million tons of potash mined from the Danakhil mine in the Afar region of northeast Ethiopia once production commences.
Allana holds a concession to mine potash in Ethiopia, through its subsidiary, Allana Potash Afar Plc. Pursuant to its feasibility study, Allana estimates that its Danakhil project could yield up to one million tonnes of muriate of potash production per year for 25 years.
ICL's offer is in line with the company's "Next Step Forward" strategy to broaden its sources of raw materials globally while reducing ICL's production costs and focusing on high growth emerging markets that will support the company's growth over the next decade. ICL currently produces potash at mines located in Israel, Spain and the UK, and in 2014 it sold over five million tonnes of potash to external customers worldwide.
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 and reduce the company's risks associated with the project. Acquiring Allana will further contribute to ICL's commitment to the project, thereby increasing the potential of its successful development.
ICL believes that the Ethiopian government is fully supportive of developing the country's potash resources in order to unlock the potential of agriculture in Ethiopia, increase productivity and improve balanced fertilization, especially among Ethiopia's small farmers, and that the government has indicated its interest in supporting ICL's efforts through the development of the required infrastructure and provision of natural resources that will be required to develop the large-scale mining project at Dallol.
Over the past year, ICL has accelerated its potash production and market development efforts in Africa in order to create a market for potash by sponsoring, in conjunction with Ethiopia's Ministry of Agriculture and its Agriculture Transformation Agency, a 'Potash for Growth' potash awareness program. The program includes the creation of hundreds of potash demonstration plots in Ethiopia, support of a nationwide soil fertility mapping effort to recommend optimal fertilizer applications on local levels, and sponsorship of research by graduate students at Ethiopian universities to increase knowledge of balanced fertilization and develop specialists in plant nutrition.
About ICL
ICL is a global manufacturer of products based on specialty minerals that fulfill humanity's essential needs primarily in three markets: agriculture, food and engineered materials. The agricultural products that ICL produces help to feed the world's growing population. The potash and phosphates that it mines and manufactures are used as ingredients in fertilizers and serve as an essential component in the pharmaceutical and food additives industries. The food additives that ICL produces enable people to have greater access to more varied and higher quality food. ICL's water treatment products supply clean water to millions of people, as well as to industry around the world. Other substances, based on bromine and phosphates, help to create energy that is more efficient and environmentally friendly, prevent the spread of forest fires and allow the safe and widespread use of a variety of products and materials.
ICL benefits from a broad presence throughout the world and proximity to large markets, including in emerging regions. ICL operates within a strategic framework of sustainability that includes a commitment to the environment, support of communities in which ICL's manufacturing operations are located and where its employees live, and a commitment to all its employees, customers, suppliers and other stakeholders.
ICL is a public company whose shares are dual listed on the New York Stock Exchange and the Tel Aviv Stock Exchange (NYSE and TASE: ICL). The company employs approximately 12,500 people worldwide, and its sales in 2014 totaled US$6.1 billion. For more information, visit the company's website at http://www.icl-group.com
Forward Looking Statement
This press release contains forward-looking assessments and judgments regarding macro-economic conditions and the Group's markets, and there is no certainty as to whether, when and/or at what rate these projections will materialize. Management's projections are likely to change in light of market fluctuations, especially in ICL's manufacturing locations and target markets. In addition, ICL is likely to be affected by changes in the demand and price environment for its products as well as the cost of shipping and energy, whether caused by actions of governments, manufacturers or consumers. ICL can also be affected by changes in the capital markets, including fluctuations in currency exchange rates, credit availability, interest rates, etc.
PRESS CONTACT
Amiram Fleisher
Fleisher Communications
+972-3-6241241
amiram@fleisher-pr.com
