By Sudarshan Varadhan and Rod Nickel
NEW DELHI/WINNIPEG, March 29 (Reuters) - India’s competition regulator said the proposed merger of fertilizer producers Agrium Inc and Potash Corp of Saskatchewan Inc is likely to hurt competition, but the comments were not expected to prevent the merger.
Potash Corp and Agrium agreed to merge last September to navigate a severe industry slump by boosting efficiency and cutting costs.
Neither Canadian company has a physical presence in India, but they supply potash to India through Canpotex Ltd, which they own with Mosaic Co.
“The commission is of the (initial) opinion that the proposed combination is likely to have an appreciable adverse effect on competition,” the Competition Commission of India said, according to a government statement on Wednesday.
The commission made similar comments a week ago about the proposed combination of chemical producers Dow Chemical Co and DuPont.
The Indian commission has now begun the second phase of its review process, similar to the process under way in the United States, Canada and China, said Potash spokesman Randy Burton.
“It is premature and inappropriate to speculate on whether any reviewing agency will object to the transaction or seek to impose conditions,” he said.
The commission’s comments are of little consequence to the Potash-Agrium merger because the companies do not own assets in India, said Bernstein analyst Jonas Oxgaard.
“The only regulators that really matter in this (are) Canada and the U.S., and neither of them have objections as near as we can tell,” he said.
The Indian regulator has sought public opinion on the deal and has directed the two firms to publish details of the proposed merger, the government statement said. The companies complied last week, Burton said.
Potash and Agrium shares traded less than 1 percent higher in afternoon trading.
Reporting by Sudarshan Varadhan in New Delhi and Rod Nickel in Winnipeg, Canada; Editing by Malini Menon and Phil Berlowitz