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Canadian Board Weighs In on Potashcorp Bid

by Alexander H. Tullo
October 11, 2010 | A version of this story appeared in Volume 88, Issue 41

The nonprofit Conference Board of Canada has submitted a report to the government of Saskatchewan concerning BHP Billiton’s proposed hostile takeover of PotashCorp. The board says that the acquisition would result in about $200 million in decreased revenues to the province annually because of taxes that BHP would be able to avoid. However, the group says the acquisition would have a positive impact for expansion of potash mines in the province. The report adds that if PotashCorp were taken over by China’s Sinochem, as has been speculated in press reports, the revenue effects on the province would be more severe. This is largely because Sinochem would have the incentive to run the potash mines at full capacity for export to China and to depress potash prices. PotashCorp disagrees with the report, saying that the revenue loss to the province from an acquisition is “understated” in the report.

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