Engineering News

ICL to Acquire Astaris, Major US Producer of Specialty Phosphates
Thursday September 1, 3:05 am ET

$255 Million Acquisition of Astaris Assets (2004 sales: $350 Million) Will Significantly Enhance ICL's Downstream Operations and Make it a World Leader in Specialty Phosphates

TEL AVIV, Israel, September 1 /PRNewswire-FirstCall/ -- Israel Chemicals Ltd. ("ICL" (TASE:CHIM), a multinational fertilizer and specialty chemicals company, today announced that it has entered into a definitive agreement to acquire the business and assets of Astaris a 50/50 joint venture between Solutia Inc. and FMC Corporation, for $255 million on a debt-free basis.

Astaris is a leading US manufacturer and marketer of specialty phosphates, thermal phosphoric acid, and phosphorus chemicals for industrial use with revenues of $350 million in 2004. It employs approximately 570 persons and operates major facilities in Missouri, New Jersey, Kansas, Illinois, California and Brazil.

The acquisition of Astaris' business and assets stems from ICL's strategy to increase its higher value-added downstream products business. Astaris' business activities are highly complementary to those of ICL Performance Products, one of ICL's four operating segments, which produces specialty phosphate downstream products for a variety of industries. Following receipt of required regulatory approvals and satisfaction of other closing conditions, Astaris' business will become a part of the Performance Products segment.

The acquisition of Astaris' complementary business activities represents a major step for ICL in the US and significantly strengthens its Performance Products segment's geographic reach and manufacturing capability in specialty phosphates, especially in North and South America. In addition to its US operations, Astaris operates two production facilities in Brazil, a market with significant growth potential and where ICL Performance Products already maintains operations and recently acquired Adicon Industria E Comercio De Additivos Ltda, a food additives manufacturing company. While Astaris produces and sells thermal phosphoric acid and phosphate salts in the US and South America, and markets phosphorus and derivatives, ICL Performance Products manufactures purified phosphoric acid in Israel and phosphate salts and food additives in Europe and in China, with sales concentrated in Europe and the Far East.

Aside from complementary geographical operations, technology and products, ICL management anticipates additional synergies between the two businesses based on ICL's extensive logistical and marketing capabilities and favorable access to raw materials, which will result in increased capacity and more efficient sourcing of production. Based on their respective financial results, combined sales of ICL Performance Products and Astaris are approximately $1 billion.

The acquisition is a strategic fit between the two entities, increases ICL's presence in the US and positions it as a global force for production and marketing of downstream specialty phosphates products. The synergies arising from the acquisition will enable ICL to immediately expand its higher value-added downstream products business, enable ICL Performance Products to compete more effectively in world markets and create additional value for ICL shareholders.

ICL intends to finance the acquisition, the terms of which have been approved by its Board of Directors, from its existing cash flow and credit facilities. The transaction is subject to approval by US Antitrust authorities and the bankruptcy court overseeing the reorganization under Chapter 11 of Solutia and other customary conditions. The purchase price may be adjusted based upon certain financial criteria of Astaris on the date of closing.

Deutsche Bank Securities Inc. acted as sole financial advisor to ICL on this transaction.

About ICL Performance Products

ICL Performance Products is one of the four operating segments of the ICL Group (TASE: CHIM), a multinational producer of a broad range of chemicals and chemical-based products. ICL Performance Products' 2004 revenues totaled approximately $583 million with gross profit of approximately $179 million, two thirds of which derived from the sale of food-grade phosphoric acid and specialty downstream products manufactured from it. ICL Performance Products' phosphoric acid is produced from phosphate rock mined by ICL Fertilizers in Israel's Negev Desert. ICL Performance Products' production facilities are located in Europe, Israel, China and other countries.

ICL Performance Products' product lines include food-grade phosphoric acid, phosphate salts, food additives and hygiene products, as well as specialty products based on aluminum oxide and other raw materials. Its food additives contribute to the appearance, texture, taste and preservation of a wide variety of foods, including processed meat, fish and seafood as well as cheese and milk products.

About the ICL Group

ICL is a multinational company with leading positions in potash and bromine. In 2004, over 92% of ICL's sales were outside of Israel and approximately 45% of ICL's total sales were of products that ICL manufactured outside of Israel.

ICL has direct access to low-cost, high-quality materials through an exclusive concession from the State of Israel to extract minerals from the Israeli side of the Dead Sea. ICL extracts from the Dead Sea potash, bromine, magnesium chloride and sodium chloride. ICL also mines phosphate rock from Israel's Negev Desert and potash and salt from its mines in Spain and the United Kingdom.

ICL's principal manufacturing and production facilities are located in Israel, Germany, The Netherlands, Spain, the United Kingdom, the United States and France. ICL has additional manufacturing and production facilities in Austria, Belgium, Turkey, China, Brazil, Argentina and Australia. ICL also has marketing offices and distribution and logistics facilities worldwide. ICL enjoys transportation and logistical advantages due to the proximity of its production facilities to seaports in both Israel and Europe.

ICL is a public company in Israel whose shares are listed on the Tel Aviv Stock Exchange (TASE:CHIM). Israel Corporation Ltd., a company listed on the Tel Aviv Stock Exchange and controlled by the Ofer Group, currently holds approximately 50% of ICL's outstanding shares. ICL's remaining outstanding shares are held by Potash Corporation of Saskatchewan, who holds approximately 10.2% of ICL's outstanding shares, by various institutional investors and by the general public.

Source: ICL - Israel Chemicals Ltd.

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