The poetry of Potash Corp.’s attempted takeover by the Dead Sea – Editorial (Globe and Mail – April 12, 2013)

Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

There is a certain poetic justice in the difficulties that Potash Corp. of Saskatchewan Inc. is having as it tries to acquire a controlling interest in Israel Chemicals Ltd., although the government of Israel should not stand in its way, yielding to economic nationalism.

In 2010, the management of Potash Corp. was quite willing to let Canadian economic nationalism work against its proposed takeover by BHP Billiton Ltd., an Australian-British mining corporation; in the end, the federal government took the position that BHP’s purchase would not be of net benefit to Canada.

Yair Lapid, the new Israeli Finance Minister, has gone so far as to say that a takeover by Potash would be “an un-Zionist act.” Such an opinion as applied to a Canadian company presents a striking contrast with the Canadian government’s emphatic support for Israel, expressed in Prime Minister Benjamin Netanyahu’s invitation to John Baird, the Minister of Foreign Affairs, to help revive the Middle East process; Mr. Baird has described himself as a “true believer.”

Israel Chemicals, which mines the Dead Sea at Sdom (named after the Biblical Sodom), is the sixth-largest potash producer in the world, in a highly concentrated industry.Two marketing organizations with 70 per cent of the world’s market have the effect of making the sales of potash into a near-duopoly; Potash Corp. is part of the agency called Canpotex. If Mr. Lapid had taken a stand for a more competitive international market in fertilizer, he would have had a better point.

The Dead Sea plant is particular desirable one, because the potash is more accessible than anywhere else in the world, but the controversy about the proposed purchase has reduced the share price of Israel Chemicals. Israel is a member in good standing of the Western world, and Israelis should be proud of the comparative openness of their economy and desist from economic nationalism – to which, of course, Canadians are not immune.

For the digital original, click here:

Comments are closed.