Saskatchewan rejects BHP takeover of Potash Corp

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Saskatchewan Premier Brad Wall on Thursday recommended that Ottawa reject BHP Billiton proposed takeover of Potash Corp, saying it does not provide a "net benefit" to Canadians.

"The province of Saskatchewan cannot support the current takeover bid by BHP Billiton," Wall said.

"It's our government's belief that the people of Saskatchewan deserve nothing less than a potash industry unequivocally managed, operated and marketed for the benefit of Canada and Saskatchewan."

The premier said the takeover bid fails Canada's "net benefit" test by putting thousands of jobs and six billion dollars of capital expansion at risk, and losing Canadian control of an important Canadian resource.

Wall also said the province would lose three billion dollars in royalty payments over 10 years from the mining of the world's largest potash deposit, used to make fertilizer, if ownership of Saskatchewan-based Potash Corp passed to BHP.

While Saskatchewan cannot stop the takeover of Potash Corp, it can influence a federal decision on the matter.

Industry Canada under the Investment Canada Act must conclude that the deal provides a "net benefit" to Canada in order to approve it. Its decision is expected next month.

Prime Minister Stephen Harper told parliament on Wednesday his government would "listen to all sides on the matter."

However, he then went on appearing dismissive: "This is a proposal for an American controlled company to be taken over by an Australian controlled company."

Canada has only once rejected a foreign takeover of a Canadian company, saying no in 2008 to US-based Alliant Techsystems' purchase of satellite and space robotics firm MacDonald, Dettwiler and Associates Ltd (MDA).

BHP Billiton chairman Jac Nasser meanwhile told shareholders Thursday that the mining giant would pull out of a hostile 40-billion-dollar bid for Canada's Potash Corp if it proves too expensive.

Anglo-Australian firm BHP has promised to make "significant commitments" to ensure that the Canadian region gained from the deal, but Nasser said Thursday that there was a limit to how much it would offer.

© 2010 AFP

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