BHP is withdrawing its $38.6 billion bid for PotashCorp after talks with Canadian regulators broke down. Canada's Ministry of Industry blocked the deal November 3, saying BHP's offer would not meet federal requirementsunder the Investment Canada Act that a foreign takeover of a Canadian asset render a "net benefit" to Canada. The Ministry gave BHP 30 days to sweeten its bid, but BHP says additional concessions would have conflicted with its business strategy. BHP had already promised to base its global potash business in Saskatchewan, transfer relevant management functions currently based at PotashCorp’s centerin Chicago back to the province, and grow employment levels at PotashCorp's Canadian operations by 15% over 5 years. The company also committed $450 million on exploration and development over the next five years, and an additional $370 million would have been spent on infrastructure funds in Saskatchewan and New Brunswick. "Unfortunately, despite having received all required anti-trust clear-ancesfor the Offer, we have not been able to obtain clearance under the Investment Canada Act and have accordingly decided to withdraw the Offer," says BHP CEO Marius Kloppers. "We remain committed to Canada and we plan to develop a significant presence in the potash industry in Saskatchewan."
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