BHP Billiton has withdrawn its $40-billion hostile-takeover bid of Potash Corporation of Saskatchewan, the Australian company said Sunday.
The company's announcement comes about 10 days after the Canadian government ruled the acquisition would not provide a net benefit to the country.
'The proposed undertakings offered by BHP Billiton … were unparalleled in substance, scope and duration.' — BHP Billiton news release
In a statement, BHP Billiton suggested the government's opinion was incorrect.
"BHP Billiton continues to believe its offer would have resulted in a significant net benefit to Canada . … As a package, the proposed undertakings offered by BHP Billiton … were unparalleled in substance, scope and duration, reflecting the importance of potash to Canada and Saskatchewan," the statement said.
"The company has offered to commit to legally binding undertakings that would have, among other things, increased employment, guaranteed investment and established the company's global potash headquarters in Saskatoon."
Federal Industry Minister Tony Clement publicly declared the government's decision to quash the takeover on Nov. 3 but gave BHP Billiton 30 days to make additional representations so he could make a "final decision."
The Investment Canada Act allows Ottawa to block any deal worth $299 million or more if the government finds it doesn't provide "net benefits" to Canadians.
Sunday's development renders the need for a further decision from Clement moot.
In the wake of Sunday's announcement, Clement issued a statement thanking BHP Billiton for its "good faith and integrity" while Industry Canada evaluated its bid.
Clement hinted he's open to hearing suggestions for how the government could improve the bid-review process for major investments in Canada.
"Our policy has always been clear: we welcome foreign investment for all the benefits it brings, including new ideas, sources of capital, and job creation," he said. "Simply put, foreign investment is in the best interests of Canada and an open global economy."
The Saskatchewan government also opposed the sale of PotashCorp, citing a study that pointed out losses in provincial revenues over the next decade and because potash is a strategic resource in how it's used in food production.
The province produces 30 per cent of the world's potash, a crop nutrient.
BHP had offered to offset provincial revenue losses by contributing to an infrastructure fund, a proposal Saskatchewan officials have called inadequate.
Despite the failed bid for PotashCorp, BHP Billiton CEO Marius Kloppers restated his commitment Sunday to the Jansen Lake mine in Saskatchewan.
Kloppers said Sept. 20 that BHP has already invested $400 million in the Jansen project and hopes to start producing potash from the mine by 2015.
Once at full production, Jansen is expected to produce about eight million tonnes per year.