DEALTALK-Limited Potash backlash seen for Canada-Australia deals

* Agrium’s $1.1 bln AWB purchase seen unaffected

* Australia clears takeover by Canadian gold miner on Thurs

* Fodder for opponents Singapore Exchange takeover of ASX
(For more Reuters DEALTALKS, click [DEALTALK/]

By Michael Smith

SYDNEY, Nov 4 (BestGrowthStock) – Corporate Canada’s love affair
with Australian assets is unlikely to be tarnished by Ottawa’s
decision to reject BHP Billiton’s (BHP.AX: ) $39 billion bid for
Potash.

Canadian firms have made bids for more than $10 billion of
Australian agricultural, resource and toll-road assets this
year with more deals believed to be in the pipeline, according
to bankers.

While some takeovers such as Agrium Inc’s (AGU.TO: ) $1.2
billion bid for AWB (AWB.AX: ) are waiting to clear final
regulatory hurdles, there were early signs that Australia would
not take the issue personally.

Just hours after the Potash decision was announced,
Australia cleared Canadian gold miner Anatolia Minerals
Development’s (ANO.TO: ) $1.1 billion acquisition of Australia’s
Avoca Resources (AVO.AX: ). [ID:nSDY4ME643]
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For other BHP-Potash stories [ID:nN22340110]

Q+A on what next for BHP [ID:nSGE6A3004]

FACTBOX on recent Australia-Canada deals [ID:nSGE6A30A0]
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SIZE MATTERS

Bankers and lawyers said on Thursday politics would
increasingly get in the way of takeovers but mainly due to the
sheer size of deals rather than the result of a shift in
thinking.

“When you have deals in the $3 to $4 billion mark they
don’t really annoy anyone. For deals above $10-$12 billion you
start running into political issues more,” said one banker who
has advised on a string of multi-billion dollar deals.

Lawyers said the decision did not necessarily indicate
Canada and other governments were toughening their stance on
mergers and acquisitions.

“It’s all done case by case. I don’t think it means that
anyone’s taken a left turn in terms of blocking major
acquisitions,” said Russell Miller, chairman of Australian law
firm Minter Ellison.

“This was always going to be a hard one for BHP, but they
still have a review to go.”

The Singapore Exchange’s (SGXL.SI: ) $7.9 billion takeover
bid for Australian bourse ASX Ltd (ASX.AX: ) is also running into
political obstacles as it needs approval from Australia’s
parliament to change ownership restrictions. Some politicians
have already indicated they are opposed to the deal.

“In one way, this will give more fodder to Australian
lawmakers to block the SGX transaction,” said a source familiar
with the ASX/SGX deal.

“They will argue that if Canada can protect one of its
private enterprise from being acquired by a foreign company,
then why should Australia allow a state-backed entity to buy
its stock exchange.”

Lawyers said consolidation meant companies were eyeing an
increasingly larger slice of the action and markets became more
concentrated.

“Once you get that situation, irrespective of whether it’s
potash or some other mineral, you’re more likely to have a
greater effect on competition from the deal, either from
conglomerate effects or by removing a competitor from the
market,” said Sharon Hendrick, a partner at Australian law firm
Mallesons Stephens Jacques.
(Additional reporting by Sonali Paul in Melbourne and Denny
Thomas in Hong Kong; Editing by Lincoln Feast)

DEALTALK-Limited Potash backlash seen for Canada-Australia deals