CANADA has dealt a near-fatal blow to mining giant BHP Billiton’s $39bn (£24.7bn) plan to buy Potash Corp, after its industry minister blocked the bid and declared that the takeover would not sufficiently benefit the country.
It is only the second time Canada has halted a foreign takeover since the power was introduced 25 years ago, in a politically-charged move to block the biggest takeover in the nation’s history and a cornerstone of BHP’s expansion strategy.
Tony Clement, the Conservative minister responsible for the blow, has given UK-listed BHP Billiton 30 days to amend its offer. The two sides have been trying to thrash out a suitable deal since BHP first approached fertiliser producer Potash in August.
“Canada is a place where its national government must do the right thing when faced with difficult decisions,” said Clement last night. “Some decisions can only be taken once and there’s no turning back, ever, and this is the case here.”
Politicians in the province of Saskatchewan, where Potash is based, had threatened to sue the government if it gave clearance to the takeover.
BHP said in a statement it was “disappointed, but continues to believe that the offer is of net benefit to Saskatchewan, New Brunswick and Canada.” The firm said it will co-operate with the government.