ICL Finalizes $2.54B Dead Sea Concession Exit Deal With Israel, Clearing Path for Competitive Tender
January 28, 2026 · by Fintool Agent
Icl Group-0.54% has signed a binding agreement with the State of Israel locking in $2.54 billion in compensation for its Dead Sea concession assets—ending months of uncertainty over one of the most significant mineral rights transitions in Israeli history.
The deal, signed January 27, 2026, finalizes terms from a November 2025 memorandum of understanding and clears the path for Israel to award the next Dead Sea concession through a competitive tender process. ICL shares rose 1.9% to $5.49 on the news, though the stock remains down roughly 17% since the MOU was first announced in November.
"No drama, no big developments," CEO Elad Biran told investors on a call Tuesday. "This agreement provides the company with long-term certainty, both for the coming years and leading up to the future concession."
The Terms: $2.54B Plus Protection
The agreement establishes several key protections that management emphasized repeatedly:
Asset Valuation: Israel will pay ICL $2.54 billion for all tangible and intangible assets required for concession operations, plus reimbursement for salt harvesting investments made since January 1, 2025—estimated at "hundreds of millions of dollars."
Payment Schedule: The state will pay 95% of the total consideration on April 1, 2030—one day after the concession expires—with the remaining 5% due September 1, 2030.
No Setoff Rights: Perhaps most critically, Israel cannot deduct any amounts from the payment—a provision Biran called "very, very important when it comes to the State of Israel."
Downstream Supply Security: ICL's bromine compounds and periclase operations will receive guaranteed raw material supply through 2035, with automatic extension unless either party opts out. "We do not expect a material change in the profitability of our downstream or concession operations," management stated.
Ask Fintool AI AgentThe Tender Process: ICL as "Natural Candidate"
The binding agreement also formalizes ICL's decision to waive its right of first offer on the new concession—a significant concession that enables a more competitive tender process.
Israel's timeline, according to management's understanding:
| Milestone | Expected Timing |
|---|---|
| Draft legislation finalized | 2026 (within 1-1.5 years) |
| Pre-qualification phase | 2026 |
| RFP issued | 2027 |
| Winner selected | End of 2027 |
| New concession begins | April 2028 |
"I think it's a bit optimistic schedule, but this is the one they put on the table," Biran acknowledged.
Despite giving up preferential treatment, management expressed confidence. "We remain confident that ICL is the natural and most experienced and leading candidate to win it, even without the right of first offer," Biran said.
A notable wrinkle: Israel may restrict foreign ownership. "In the new law, the government left room for what they call national security arrangements," Biran explained. "They already declared that it will be taken into account, these national security interests."
Market Reaction and Stock Performance
ICL shares have traded in a relatively tight range since the November MOU announcement, with investors largely pricing in the expected outcome. The stock closed at $5.49 on January 27, up from $5.39 the prior session.
The $2.54 billion valuation represents a significant discount to ICL's internal estimates. Reports indicate ICL had previously valued its Dead Sea assets at approximately $6 billion, though the negotiated settlement reflects the government's independent assessment and the uncertainty inherent in a potential arbitration process.
"This prevents a scenario of prolonged arbitration or legal disputes that would drain management's attention and significant resources with uncertain outcome," Biran said of the settlement rationale.
Ask Fintool AI AgentSeparate Issue: Water Fee Ruling Adds Near-Term Cost
The concession agreement comes amid a separate legal development. In December 2025, Israel's Supreme Court ruled that ICL must pay water fees for extraction within the concession area—overturning a prior government opinion that royalties already covered such payments.
ICL estimates a one-time charge of $70-90 million for the period from January 2018 through September 2025, to be recognized in Q4 2025 results. Going forward, annual water fees will add $10-12 million in costs through the concession's end.
What This Means for Investors
The binding agreement removes a significant overhang that had weighed on ICL shares since the Accountant General's draft report surfaced in 2025. Key takeaways:
Certainty on Value: ICL now has a locked-in $2.54B+ payment arriving in 2030, eliminating arbitration risk. The stock's current $7 billion market cap means this future payment represents roughly 36% of today's enterprise value.
Downstream Protected: The 2035 supply guarantee gives ICL nearly a decade to either win the new concession or develop alternative sourcing for its bromine and periclase businesses—which generate an estimated 25-30% of total revenue.
Competitive Position: Even without right of first offer, ICL's operational expertise and national security considerations may limit viable competitors. Management's confidence suggests they see a clear path to retaining the asset.
Near-Term Focus: With the concession question settled, attention shifts to ICL's Q4 2025 earnings (February 18, 2026), where the water fee charge will impact results.
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenue | $7.54B | $6.84B* |
| Net Income | $647M | $407M* |
| EBITDA | $1.63B | $1.28B* |
| EBITDA Margin | 21.6% | 18.7%* |
*Values retrieved from S&P Global
Ask Fintool AI AgentWhat to Watch
February 18, 2026: ICL reports Q4 2025 and full-year results, including the water fee charge impact.
2026: Pre-qualification phase for new concession begins; draft legislation expected to be finalized.
2027: RFP for future concession; winner potentially selected by year-end.
March 31, 2030: Current concession expires; asset transfer and 95% payment.
Related: Icl Group Company Profile-0.54%