BHP's Potash Corp takeover bid finds favour with Investment Canada
02 November 2010
With Investment Canada having recommend approval of a hostile foreign takeover bid for Potash Corp of Saskatchewan, Canadian prime minister Stephen Harper has a tough decision, that could trigger a political fight in a key conservative stronghold, on his hand.
BHP Billiton Ltd in its interaction with Investment Canada has been able to satisfy officials that the Australian firm's plans met a 'net benefit' test that meant the $38.6-billion deal would deliver a positive net economic impact, according to those in the know of the situation.
But the final call is that of Harper and the prime minister in consultation with industry minister Tony Clement would be required to take a stand on whether a deal that would see transfer of control over a key resource to a foreign owner would indeed be in the national interest.
According to Saskatchewan premier Brad Wall approval of the deal would amount to ''a profound betrayal of our province and its people''. Wall did not rule out a constitutional challenge based on provincial ownership of resources.
According to analysts Wall's opposition poses a serious political challenge to the minority government of Harper, which holds 13 of the province's 14 seats in parliament.
Wall said yesterday that Saskatchewan's position on the issue was clear, the proposed takeover would not provide a net benefit to the people of Saskatchewan and Canada and there was therefore no case for approval by the federal government.