Premier Brad Wall believes Sask. will benefit from PotashCorp/Agrium merger
Head office of new company will be based in Saskatoon, NDP worries deal will mean fewer jobs
Premier Brad Wall says Saskatchewan's economy will only be strengthened by a merger between PotashCorp and Agrium.
The two companies officially announced the merger this morning. When it's completed, the move will create a giant agriculture company worth an estimated $36 billion US.
The new company's head office will be based in Saskatoon, with a corporate office in Calgary.
- Potash Corp., Agrium agree to merge, creating $36B agriculture giant
- Sask. Premier Brad Wall confident about PotashCorp-Agrium merger talks
"I think there's reason to be quite positive about what we see here for the province, short-term and long-term," he said.
In a news release, PotashCorp said the merger "will create $500 million in operating synergies." Wall said the layoffs will likely be on the logistics side, and shouldn't affect Saskatchewan, especially not in mine production.
Wall went on to say that PotashCorp routinely changes production schedules due to market demand.
"At the end of the day, whether there's one company or three or five, companies are going to make their decision when it comes to production," he said. "PotashCorp already mothballed a mine in New Brunswick. I don't think that's what this is all about. We'll be watching carefully for the economic interests of the province. That's my job."
Wall didn't believe that the new company will hurt farmers, either.
"PotashCorp has never been involved in the retail side," said Wall. "We're not losing a retailer on the fertilizer side for farmers as a result of this merger. I just don't see the issue for North American farms being concerned, because they're not losing a retailer."
Meanwhile, the official opposition isn't so sure about the deal. NDP Leader Trent Wotherspoon worries the merger will mean fewer jobs in the province.
"There's a lot at risk for Saskatchewan," he said. "There's no guarantees to protect Saskatchewan people on this front."
Wotherspoon is also concerned about Saskatchewan having a weaker voice at the table when it comes to its resources.
"It's also about the clout we have in the world, through a company here in Saskatchewan, being that very important voice," he said.
He was also worried about the status of the company's head office in Saskatoon.
"I think we have to be really careful on these fronts when we see these sorts of statements around a registration of a head office in Saskatoon," he said. "What does that really mean? Is that a full corporate head office, with all the potash divisions of Agrium being consolidated within Saskatoon, with all that influence and clout? What does it mean? What kind of iron-clad guarantees are being provided on that front?"
PotashCorp CEO Jochen Tilk will serve as Executive Chairman of the new company once the deal closes. Agrium President and Chief Executive Officer Chuck Magro will be the company's new CEO.
Potash prices have been low recently, with a drop in prices of $100 US per tonne compared to last year. In 2008, prices peaked at around $900 per tonne.