ICL In Major Strategic Cooperation Agreement With Yunnan Yuntianhua

(RTTNews) - Israel Chemicals Ltd. or ICL (ICL) Tuesday announced a major strategic cooperation agreement with Yunnan Yuntianhua Group Co. Ltd., a Chinese chemicals manufacturer.

ICL is a manufacturer of products based on specialty minerals that cater to three markets: agriculture, food and engineered materials. Yunnan is a manufacturer of fertilizers and downstream products derived from phosphates.

ICL will invest up to $500 million in its strategic alliance with Yunnan which will include the creation of a new joint venture company in which ICL will have 50 percent ownership and which will operate an integrated, world-scale phosphate platform across the value chain.

ICL will nominate the joint venture's CEO, COO and a VP Sales & Marketing, whereas Yunnan will nominate the JV's CFO and VP HR.

ICL will lead the operations of the business and merge ICL's existing businesses in China into this entity, which will be fully integrated into ICL's global businesses. The JV will be transformed into a fully operating business unit.

In order to strengthen the strategic partnership between ICL Yunnan Yuntianhua and to create additional value for their respective shareholders, $269 million of ICL's investment will be used to acquire a strategic holding in Yunnan Yuntianhua, a subsidiary of Yuntianhua. The newly-issued shares will represent 15 percent of Yunnan Yuntianhua's equity following their issuance to ICL.

For ICL, the transaction will be cash earnings per share accretive from the first full year of operations. The deal is expected to close in the first quarter of 2016.