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BIL
BIBLT
BIL - BHP Billiton withdraws its offer to acquire Potashcorp and reactivates
its buy-back program
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
BHP BILLITON WITHDRAWS ITS OFFER TO ACQUIRE POTASHCORP AND REACTIVATES ITS BUY-
BACK PROGRAM
BHP Billiton (ASX:BHP/LSE:BLT/NYSE:BHP and BBL/JSE:BIL) today announced that
it has withdrawn its offer to acquire all of the issued and outstanding common
shares of Potash Corporation of Saskatchewan Inc. ("PotashCorp")
(NYSE:POT/TSX:POT) (the "Offer").
BHP Billiton has determined that the condition of its Offer relating to
receipt of a net benefit determination by the Minister of Industry under the
Investment Canada Act cannot be satisfied, and accordingly, the Offer has been
withdrawn. A total PotashCorprelated transaction cost of approximately US$350
million, of which approximately US$250 million related to the US$45 billion
acquisition financing facility, will be recognised as an exceptional item in
the December 2010 interim accounts.
BHP Billiton continues to believe its Offer would have resulted in a
significant net benefit to Canada, Saskatchewan and New Brunswick. As a
package, the proposed undertakings offered by BHP Billiton in a signed,
written submission to the Minister of Industry were unparalleled in substance,
scope and duration, reflecting the importance of potash to Canada and
Saskatchewan. The company had offered to commit to legallybinding undertakings
that would have, among other things, increased employment, guaranteed
investment and established the company`s global potash headquarters in
Saskatoon, Saskatchewan.
The investment commitment included US$450 million on exploration and
development over the next five years over and above commitments to spending on
the Jansen project. An additional US$370 million would have been spent on
infrastructure funds in Saskatchewan and New Brunswick. BHP Billiton would
also have applied for a listing on the Toronto Stock Exchange.
In addition, BHP Billiton was prepared to make a unique commitment to forego
tax benefits to which it was legally entitled and, as a condition of the
Minister`s approval, BHP Billiton was prepared to remain a member of Canpotex
for five years. Both of these undertakings were intended to allay any concerns
the Province of Saskatchewan may have had regarding potential losses in
revenues.
Further, to give the company an even stronger Canadian presence, BHP Billiton
undertook to relocate to Saskatchewan and Vancouver over 200 additional jobs
from outside Canada. BHP Billiton would have maintained operating employment
at PotashCorp`s Canadian mines at current levels for five years and would have
increased overall employment at the combined Canadian potash businesses by 15%
over the same period. BHP Billiton also made a number of additional
undertakings in relation to Saskatchewanian and Canadian participation in
senior management roles within the combined potash business, within a new
Potash Advisory Board and also on the Board of BHP Billiton.
Local suppliers would have been guaranteed a full and fair opportunity to
provide goods and services and BHP Billiton undertook to spend at least US$8
million per annum on community programs, primarily in Saskatchewan and New
Brunswick, while raising overall community spending from PotashCorp`s current
levels to BHP Billiton`s levels. BHP Billiton also offered to invest in the
University of Saskatchewan to create a Mining Centre of Excellence to enhance
the province`s mining capabilities and to raise the international profile of
both the University and the province.
BHP Billiton was prepared to accept an unprecedented monitoring and compliance
regime that would have provided the Government with additional assurances that
the undertakings would be complied with, including making available a US$250
million performance bond.
During the investment review process, BHP Billiton engaged extensively with
officials from the Investment Review Division of Industry Canada. In view of
the reasons underlying the Minister`s interim decision of November 3, the
company believes that the Minister of Industry would have required additional
undertakings beyond those BHP Billiton had already offered which would have
conflicted with BHP Billiton`s business strategy and been counter to creating
shareholder value.
BHP Billiton Chief Executive Officer Marius Kloppers expressed disappointment
at the outcome while emphasising the company`s commitment to Canada and
disciplined approach to shareholder value.
"Unfortunately, despite having received all required anti-trust clearances for
the Offer, we have not been able to obtain clearance under the Investment
Canada Act and have accordingly decided to withdraw the Offer. We remain
committed to Canada and we plan to develop a significant presence in the
potash industry in Saskatchewan. As part of those plans we will continue to
progress our Jansen Project and other development opportunities," he said.
"Our core business strategy of diversifying our investments across geographies
and commodities differentiates us and, more importantly, continues to deliver
value to our shareholders and the communities and countries where we operate.
We have an unparalleled portfolio of tier one assets, which we believe can
sustain decades of increased production. We plan to invest US$15 billion in
our global business this financial year and expect our ongoing capital
commitment to continue to deliver robust production growth," Mr Kloppers
added.
BHP Billiton also announced its intention to continue the company`s strong
track record of returning excess capital to shareholders by reactivating the
remaining US$4.2 billion component of its previously suspended US$13.0 billion
buy-back program.
BHP Billiton Chairman Jac Nasser said: "The decision to reactivate the buy-
back program is entirely consistent with our commitment to maintain an
appropriate capital structure while we continue to make substantial
investments in our growth projects. BHP Billiton has a strong track record of
returning capital to shareholders. From 2005, BHP Billiton has completed buy-
backs totalling US$12.7 billion or 11% of issued capital, and has also paid
out US$17.9 billion in dividends."
Additional Information
IMPORTANT INFORMATION:
Cautionary Statement Regarding Forward-Looking Statements
This document may contain, in addition to historical information, certain
forward-looking statements. Often, but not always, forward-looking statements
can be identified by the use of words such as "plans", "expects", "expected",
"scheduled", "estimates", "intends", "anticipates", or "believes", or
variations of such words and phrases or state that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved. Such forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that could cause actual results,
performance or achievements of BHP Billiton to differ materially from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Many of these risks and uncertainties relate to
factors that are beyond BHP Billiton`s ability to control or estimate
precisely, such as future market conditions, changes in regulatory environment
and the behaviour of other market participants. BHP Billiton cannot give any
assurance that such forward-looking statements will prove to have been
correct. The reader is cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date of this document. BHP
Billiton disclaims any intention or obligation to update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise, except as required by applicable law. Nothing contained herein
shall be deemed to be a forecast, projection or estimate of the future
financial performance of any member of the BHP Billiton Group unless otherwise
stated.
Further information on BHP Billiton can be found on our Internet site:
www.bhpbilliton.com
AUSTRALIA UNITED KINGDOM & SOUTH AFRICA
Brendan Harris, Investor Andre Liebenberg, Investor
Relations Relations
Tel: +61 3 9609 4323 Mobile: Tel: +44 20 7802 4131
+61 437 134 814 Mobile: +44 7920 236 974
email: email:
Brendan.Harris@bhpbilliton.com Andre.Liebenberg@bhpbilliton.
com
Leng Lau, Investor Relations UNITED KINGDOM & AMERICAS
Tel: +61 3 9609 4202 Mobile: Ruban Yogarajah, Media
+61 403 533 796 Relations
email: Tel: US +1 713 966 2907 or UK
Leng.Y.Lau@bhpbilliton.com +44 20 7802 4033
Mobile: UK +44 7827 082 022
Amanda Buckley, Media Relations EMAIL:
Tel: +61 3 9609 2209 Mobile: RUBAN.YOGARAJAH@BHPBILLITON.C
+61 419 801 349 OM
email:
Amanda.Buckley@bhpbilliton.com AMERICAS
SCOTT ESPENSHADE, INVESTOR
Kelly Quirke, Media Relations RELATIONS
Tel: +61 3 9609 2896 Mobile: Tel: +1 713 599 6431
+61 429 966 312 Mobile: +1 713 208 8565
email: email:
Kelly.Quirke@bhpbilliton.com Scott.Espenshade@bhpbilliton.
com
Fiona Martin, Media Relations
Tel: +61 3 9609 2211 Mobile:
+61 427 777 908
email:
Fiona.Martin2@bhpbilliton.com
BHP Billiton Limited ABN 49 004 BHP Billiton Plc Registration
028 077 number 3196209
Registered in Australia Registered in England and
Registered Office: 180 Lonsdale Wales
Street Registered Office: Neathouse
Melbourne Victoria 3000 Place
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Tel +61 1300 55 4757 Fax +61 3 Kingdom
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20 7802 4111
Members of the BHP Billiton group which is headquartered in
Australia
Date: 15/11/2010 07:30:01 Produced by the JSE SENS Department.
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