Toronto, Nov 1 (IANS) The hostile takeover bid by the British-Australian BHP Billiton Ltd for the world’s biggest fertilizer company – Potash Corporation of Saskatchewan (PCS) – here has triggered a big headache for the Canadian government.
BHP, the Anglo-Australian mining giant, launched the takeover bid with a $39 billion offer in August – by far the biggest globally this year. It is now willing to raise it by 10 percent.
As the foreign-investment friendly Canadian government deals with the headache, Saskatchewan province – where the Potash Corporation is based and which sends many MPs of the ruling party – is urging the central government not to sell the country’s strategic resource.
With potash set to become a prized commodity as the world struggles to meet impending food shortages to feed its burgeoning population, Saskatchewan Premier Brad Wall worries that the deal will amount to ‘sell-out” of Canada’s strategic resources.
‘How do you overcome the strategic concern? … This is more important going forward for the country than maybe it ever has been because the world is prizing food security and energy security,” the premier said this week.
‘Isn’t it time that we maybe got a little bit circumspect about deals that involve this size of a reserve and this size of a company?”
The opposition party, which is just six points behind the ruling party in opinion polls, is also opposed to the deal.
Analysts say the government’s decision on the issue this week will have a bearing on the future of BlackBerry maker Research In Motion (RIM) whose future currently looks uncertain as it faces onslaught from competitors.
Looking at the possibility of a similar foreign takeover bid for RIM, the Globe and Mail said Sunday, ‘RIM also boasts a coveted global brand, an intensely loyal customer base and a treasure trove of intellectual property.
‘All of that would make RIM a nice catch for any rival. Not surprisingly, its competitors are all foreign – Nokia (Finland), Apple (US), HTC (Taiwan), Samsung (South Korea), Motorola (U.S.), Sony Ericsson (Japan-Sweden) or LG (South Korea). Voracious Microsoft (US) might also find RIM attractive.”
The paper said, ‘A RIM takeover would make Ottawa’s decision this week on Potash Corp. look like a casual coin flip. In RIM, you have one of the country’s most valuable companies… The company is also a major supplier of equipment and secure communications to federal and provincial governments.
‘It’s rare that a Canadian politician, Prime Minister Harper included, doesn’t brag about RIM when they’re on the road in the world, talking trade. The BlackBerry is a source of national pride, just as Nortel once was. If Potash Corp. is put off limits, surely RIM would be too.”
(Gurmukh Singh can be contacted at gurmukh.s@ians.in)
