22 October 2010 19:25 [Source: ICIS news]
TORONTO (ICIS)--BHP Billiton on Friday pledged to keep its promises and commitments - especially on jobs, investments and taxes - if Canada’s federal government approves its $40bn (€29bn) hostile takeover of PotashCorp, the world’s largest fertilizer firm.
“We believe that promises made must be promises kept and we are proud of our track record of honouring our commitments worldwide,” said Andrew Mackenzie, chief executive of BHP’s non ferrous business.
He responded to Thursday’s official rejection of BHP's bid by ?xml:namespace>
Saskatchewan provinical Premier Brad Wall, citing numerous previous cases, had charged that foreign firms had broken promises they made to the federal government in order achieve approvals for takeovers of Canadian resources firms.
BHP’s Mackenzie said his company was prepared to make commitments that would address estimated Canadian (C$) 3.00bn ($2.95bn) in revenues losses for the
He also said that BHP would return PotashCorp’s operations “to their provincial roots” after PotashCorp’s current management under CEO Bill Doyle had “drifted from its current
The remark was in reference to allegations that Doyle, an American, was running the company mainly out of offices in
In related news, federal industry minister Tony Clement said in a television interview that his ministry - which would make the final decision on whether to approve the bid - would take both Saskatchewan’s and BHP’s positions into account.
He would not speculate on the outcome and would not say whether the government may extend the 3 November deadline to issue its decision.
Canadian media commentators said
On the one hand, the government needed to respect the provincial position.
Politically, Harper’s Conservative minority government holds 14 of 15 of
But at the same time, the prime minister would be worried about the implications of a negative decision on future foreign investments and
Also, in case of a negative decision, Harper would need to justify why the many previous takeovers of Canadian resources and industrial firms - including Inco, Falconbridge, Alcan and NOVA Chemicals - had been allowed to go through.
Observers also noted that Wall said his government had applied the very same criteria the federal government uses in takeover cases to determine a “net benefit” for Canada - a possible hint that he was prepared to fight the federal government in court should it approve BHP's bid.
Meanwhile, analysts speculated that BHP would likely sell PotashCorp’s phosphate and nitrogen fertilizer businesses if its bid succeeds.
PotashCorp's share price was down 1.29% to $141.25 in afternoon trading in New York. This compares with BHP's $130/share bid price from August.
($1.00 = €0.72; $1.00 = C$1.02)
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