Government intervention to stop {
PotashCorp's acquisition leaves lingering questions for foreign investors.
By Robert Todd
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FORTRESS CANADA?
C
anada's image as a welcome destination for foreign investment was shaken last fall, when Industry Minister Tony Clement denied BHP Billiton Ltd.'s $38.6-billion bid for Potash Corp. of Saskatchewan Inc. Last November's refusal followed overwhelm- ing opposition to the bid from PotashCorp's board of directors, which called the Australian mining company's offer "grossly inad- equate" based on the company's strong long-term growth forecast. It was not surprising to see a board take such a stance, especially
when it represents an organization that produces about a quarter of the world's potash, a key fertilizer ingredient in a world struggling to produce more food on less available land than ever before. Yet the government's intervention raised eye- brows here and abroad. It was just the second time the Canadian government had stopped a deal using provisions of the Investment Canada Act, which, since 1985, has allowed the government to block deals valued at $299 million or more.
INHOUSE FEBRUARY 2011 • 17
ANTHONY TREMMAGLIA
