Industry Minister Tony Clement has decided to reject the takeover of PotashCorp which mines the famous potash fertilizer in Saskatchewan. For now. BHP, the company wanting to take over PotashCorp has been given thirty days to improve its offer. Then, the minister will review the offer and decide whether to let it happen or not. This is a good preliminary action. Potash is a resource that will be ever more important in the future and keeping it as Canadian as possible will ensure that we don't get the short end of the stick. Besides, it's a source of pride for residents of Saskatchewan. More importantly, the takeover could put jobs and provincial revenue at risk. I wouldn't go as far as to say that the potash business should be renationalized, but a big chunk should remain in the hands of Canada. What I think will happen is that another party will put forward a deal that isn't as bad as BHP's offer. That one will probably be taken. It's a good compromise.
OTTAWA—The federal government is for now turning down the controversial buyout of PotashCorp by an Australian corporate giant.
Industry Minister Tony Clement announced Wednesday that Ottawa is using its power to vet foreign investment to turn thumbs down initially on BHP Billiton Ltd.’s takeover bid.
Read more at the
Toronto Star.
What is most interesting about this decision is that it is pretty clear that they only rejected the takeover because they stand to lose quite a few seats in Sask. and possibly elsewhere because the story was gaining such national attention. And compare that to the way they have treated Newfoundland where the most they could have held was one or two seats anyway so they really didn't care what the citizens of Newfoundland thought. But you just know that they are incredibly frustrated because they are so eager to sell off as much as they can to international bidders. I say just watch for them to string BHP along for a while and then reverse their decision late on a friday night before the Christmas break.
ReplyDeleteThis decision sends a very disturbing message to investors about Canada: We're open for business ... unless we're allied with the province, in which case you'll need to give them a payoff. The world is going to be shocked at this third rate behaviour.
ReplyDeleteAnon 10:20, that is a ridiculous statement that could only have come from the conservative war room talking points.
ReplyDeleteStrategic industries in other countries continue to be under government stewardship in varying degrees, this isn't news to anyone nor is it much of an impediment to business. Canada is open for business, but that business is in our best interest and on our terms. The problem with Canadian conservatives and conservative business types here is that they would sell their own children for a buck rather than consider long term economic benefits to the country as a whole. Canadian busines has zero vision beyond cashing out and frankly, its pathetic. Sometimes selling to the highest bidder nets a loss for everyone (in canada). Being in the west I have seen so many of our valuable assets purchased by foreign companies and governments with no concern for our environment, health or jobs, and often at cut rates or with our own government's help under the false prophet of "free enterprise".
This deal clearly does not benefit canada and should be avoided - the world will get over it, or they can go buy potash from somewhere else, uh...where exactly would that be???? Russia??
You can criticize anon 10:20, but you should actually ask him/her if you can borrow their fortune telling ball. Because that is exactly the type of coverage Canada got on this. CNN had a visual with a Mountie standing at the border questioning whether Canada was accepting investment. Of course we are, well in most cases. But there was no reason to block this one. This decision tarnishes Canada's image as being open for business. Very bad move for Canada.
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