Canada extends BHP-Potash takeover review following report

The Canadian Government has extended its review of BHP Billiton's $40 billion takeover bid for Potash Corporation by 30 days.

The Canadian Government has extended its review of BHP Billiton’s $40 billion takeover bid for Potash Corporation by 30 days.

"I will take the time necessary to do a thorough review of this investment proposal," Industry Minister Tony Clement said in a statement.

The Canadian company rejected the bid when it was announced in August, calling it opportunistic.

They company has since launched legal proceedings against BHP.

China’s Sinochem Group has tried to mount a rival offer but, according to AFP, has found it difficult to find a partner.

China, a major importer of potash, is wary of a successful BHP bid, because it already buys large quantities of the company’s iron ore.

A study by the Conference Board of Canada released yesterday suggested the BHP takeover would have few negative impacts for the country, while the Sinochem bid could result in a huge drop in royalties.

However, the Canadian Government is likely to earn less tax and royalty revenues under either scenario.

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