Canada fertilizer merger faces easier approval at home than in U.S.
By John Tilak and Diane Bartz
TORONTO/WASHINGTON (Reuters) - Canada's Potash Corp of Saskatchewan (POT.TO: Quote) and Agrium Inc (AGU.TO: Quote) are more likely to win approval for a potential merger in Canada than the United States, but U.S. rejection of the deal would scuttle it globally, competition lawyers said.
Potash and Agrium confirmed merger talks on Tuesday, a deal that would create a fertilizer and farm-retailing giant.
Canada is likely to look more favorably on the combination because its regulators more strongly weigh the potential for achieving efficiencies such as reducing overhead and optimizing shipping. This position has its roots in a desire by policymakers to strengthen companies operating in Canada's smaller market.
"The efficiencies defense will certainly loom large," said Nikiforos Iatrou, competition group chair at law firm WeirFoulds, in Canada. "It's possible that in this case the efficiencies win the day in Canada but don't carry the day in the United States."
The defense was highlighted this year, when the Canadian Competition Bureau approved a deal between Superior Plus Corp SPB.TO and Canexus Corp CUS.TO, saying that efficiency gains would be greater than the anti‑competitive effects.
The U.S. Federal Trade Commission blocked the same deal, which was then scrapped.
U.S. TO FOCUS ON PRODUCT PRICING Continued...