BHP Billiton's Potash Bid May Win Regulator Approval, Credit Suisse Says

Sep 10 (Bloomberg)-

BHP Billiton Ltd., seeking to buy Potash Corp. of Saskatchewan Inc. for $40 billion in a hostile takeover, may receive regulatory approval from Canada and the U.S. with some conditions, Credit Suisse Group AG said, citing lawyers it didn’t name.

"Our U.S.-based anti-trust expert thought this deal should be approved with little difficulty,” Credit Suisse analysts led by Paul McTaggart said today in a report. The bid conditions include Canadian and U.S. competition and foreign investment approvals, BHP has said.

Potash Corp. Chief Executive Officer Bill Doyle rejected last month’s $130-a-share bid from BHP and is seeking other offers. BHP wants to make the acquisition to diversify sales and benefit from surging demand for fertilizer as food needs grow. Potash Corp. is the world’s biggest fertilizer maker.

The deal may win approval under Canada’s competition laws by Sept. 20 "without too many issues,” McTaggart said after speaking with a Canadian-based lawyer. It may also be cleared under the Investment Canada Act with some undertakings, he said. Only two deals have ever been blocked under this act, he said.

"As large as the deal is, the BHP-Potash transaction is not particularly complicated, given BHP is neither a customer nor a current producer of potash,” McTaggart said.

China’s anti-monopoly legislation may become an issue for the deal, he said. Companies with annual turnover of 10 billion yuan ($1.5 billion), or more, in China must get anti-trust approval from the Chinese government, he said.

"China may turn out to be a complicating factor in this deal, even playing as an important role as the U.S. anti-trust agencies,” he said.