It's been the talk of the province in coffee shops, and in the Legislature for months, but the final curtain has fallen.
On November 15, BHP Billiton, the Australian mining company, withdrew its $38.6 billion offer to buy PotashCorp. In a statement issued on Monday, BHP says that it "has determined that the condition of its (offer) relating to receipt of a net benefit determination by the Minister of Industry under the Investment Canada Act can not be satisfied."
BHP issued their takeover bid several months ago and have consistently said that the deal would offer a net benefit to Canada. BHP is currently in the beginning stages of developing a new potash mine near Jansen.
Less than two weeks ago, Industry Minister Tony Clement ruled that the takeover bid had no net benefit to Canada.
Clement said the bid did not meet three of the six guidelines on "net benefit." The takeover would not have a beneficial effect on Canada's ability to compete in world markets; on productivity, efficiency and innovation in Canada; and on the country's overall level of economic activity, Clement said in a news conference on November 14.
BHP still claims that the takeover would have, in fact, benefitted both the country and the province through increased employment, guaranteed investment, and the establishment of the company's global potash headquarters in Saskatoon.
"The investment commitment included U.S. $450 million on exploration and development over the next five years over and above commitments to spending on the Jansen project. An additional U.S. $370 million would have been spent on infrastructure funds in Saskatchewan and New Brunswick," BHP stated.
As well, BHP says they were prepared to forego tax benefits to which it was legally entitled to allay the province's concerns about potential losses in revenues.
Any further commitments would have conflicted with BHP's business strategy and been counter to creating shareholder value, the company said.
The Saskatchewan government has been against the deal, with Premier Brad Wall threatening to sue the federal government if the takeover bid was approved.
BHP's CEO Marius Kloppers, now facing increased scrutiny from shareholders at home in the wake of the company's third failed takeover attempt under his leadership, restated the company's commitment to continuing to develop the Jansen project. Kloppers said that BHP has already invested $400 million in the Jansen project, which is scheduled to start producing potash by 2015.
