Analysis: BHP Potash bid likely to pass regulatory muster

Thu Aug 19, 2010 10:45am EDT
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By Pav Jordan

TORONTO (Reuters) - Marius Kloppers, chief executive of BHP Billiton, says his company brings four decades of know-how to the table in asking Canadian regulators to approve its proposed takeover of Potash Corp of Saskatchewan.

Lawyers say BHP, the world's largest miner, may need its experience to ease concerns about another foreign takeover of a marquee Canadian resource company.

Political scrutiny is expected to be intense after other high-profile takeovers allowed by the minority Conservative government eventually led to Canadian job losses.

But in the end BHP is expected to convince regulators a deal for Potash Corp, the world's No.1 fertilizer supplier, is good for Canada and the Prairie province of Saskatchewan.

Canada is among the friendliest of the developed economies to foreign investment, and BHP Billiton is no stranger to dealing with foreign regulators.

"If BHP knew that this was a non-starter, we would never have heard of it," said Walid Hejazi, a professor at Rotman School of Management in Toronto.

He said the company likely held exploratory talks with the federal government before launching its bid for Potash Corp.

BHP on Wednesday took its $39 billion offer to buy Potash Corp directly to shareholders after the target company's board rebuffed its friendly approach as too low.   Continued...