Canadian chief executives and corporate leaders are concerned about the possible sale of Potash Corp. to a foreign buyer, and they want the federal government to take action to stop the sale. The proposed takeover of Potash Corp. by Australia’s resource conglomerate BHP Billiton worries the CEOs, but they are even more concerned about a potential takeover from China’s large, state-owned chemical corporation, Sinochem.
When asked recently in a Compas Inc. poll whether the Canadian government should step in to block the sale of the nation’s largest fertilizer company to Sinochem, CEOs agreed strongly, with a mean of 5.7 on a seven-point scale. They gave the same response when asked about a potential takeover by a consortium in which Sinochem has a controlling share.
The CEOs also felt the government should do what it can to block a sale to BHP Billiton, responding with a mean of 4.6. ‘We will live to deeply regret selling off the assets of our country for temporary monetary benefit to a few people,’ said one chief executive. Another added: ‘This is a jewel in our crown and an important industry to agriculture.’
The biggest reason given for opposition to a Sinochem sale was that China does not observe international patent and commercial laws. One CEO commented, ‘We certainly should not be selling to China, which is not a fair trading partner and has shown this time and time again.’ Other concerns included the redirection of profits from Canada to China, Sinochem’s status as a state-owned corporation and China’s political dictatorship.
When asked which of the three potential deals would have the best — or least bad — economic results for Canada, 63% of respondents preferred the sale to BHP Billiton. However, CEOs were concerned that if the sale to the Australian company goes through, it would result in a pricing structure that would direct profits from Canada to overseas. ‘Loss of the Canadian head office and head-office jobs is a big deal with both the Australian and Chinese proposals,’ said one chief executive.