BHP Billiton announced on November 15 it had withdrawn its $40-billion offer to acquire Potash Corporation of Saskatchewan (PotashCorp). The announcement came less than two weeks after the Canadian federal government said it would not approve the acquisition as then proposed and gave BHP Billiton 30 days to make any additional proposals relating to its offer (E&MJ, November 2010, p. 2 and p. 6).

The BHP Billiton withdrawal statement said, while the company continued to believe its offer would have resulted in a significant net benefit to Canada, it had determined it could not satisfy the government in that regard. Among the company’s offerings to the government were increased employment, guaranteed investment and location of the company’s global potash headquarters in Saskatoon, Saskatchewan. The investment commitment included $450 million to be spent on exploration and development over the next five years over and above commitments to spending on the company’s Jansen potash project 140 km east of Saskatoon.

BHP Billiton CEO Marius Kloppers expressed disappointment at the outcome but said, “We remain committed to Canada, and we plan to develop a significant presence in the potash industry in Saskatchewan. As part of those plans, we will continue to progress our Jansen project and other development opportunities.”

The withdrawal statement also said BHP Billiton would reactivate the remaining $4.2-billion component of its previously suspended $13-billion share buy-back program.

Following the company’s annual meeting on November 16, the Financial Times reported Chairman Jac Nasser had dismissed speculation BHP Billiton would no longer seek acquisition of tier-one assets as a result of the failure of its bid for PotashCorp and two other recent major merger and acquisition setbacks. “We are not going to change our strategy from looking at large, tier-one assets,” the Financial Times reported Nasser as saying.

Two days after its withdrawal from pursuit of PotashCorp, BHP Billiton announced plans to invest a further $635 million (BHP Billiton share $570 million) in growth projects at its iron ore operations in Western Australia. This investment expands on an earlier commitment of $1.73 billion announced in January 2010 and will facilitate ongoing development of important port, rail, and Jimblebar mine infrastructure.

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