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PotashCorp calls BHP’s behaviour ‘unethical’

September 1, 2010

“The hostilities between PotashCorp and its suitor BHP Billiton escalated on Tuesday when the Canadian fertiliser producer accused the multinational miner of “highly unethical” behaviour.

Potash said that BHP had made unsolicited contact with its customers as part of BHP’s $39bn hostile bid for the Canadian company.

Stephen Dowdle, PotashCorp’s sales chief, said in a letter to customers that the company had learnt that BHP had ‘begun to cold call many of you’.”

Source: Financial Times, September 1, 2010


  • PotashCorp complains about BHP Billiton calling the key customers of the company, trying to convince them about the value of the deal.
  • BHP has launched a campaign to win over stakeholders to sell their shares at $130. Marketing to other stakeholders like government, suppliers and customers is obviously part of the strategy to achieve a positive public opinion to the deal.


  • BHP’s move to discuss the results of the acquisition with PotashCorp’s clients & suppliers is not strange in itself. Paying $39bln for the company without knowing the thoughts of key stakeholders would be rather naive. However, the ‘marketing objective’ of calling the stakeholders at this stage is obvious.
  • PotashCorp itself is not fully innocent of dubious practices either. When publishing the brochure to convince shareholders not to sell to BHP Billiton, the company announced talks were ongoing with various parties that could lead to other deals. This has been one of the main reasons for the share price to increase to $150, making a quick deal for BHP Billiton unlikely.
  • Most likely BHP will have to make a new offer around $145-$150 per share to get the required two thirds of the shares. This will cost the company an additional $4.5-5.0bln.

©2010 | Wilfred Visser | thebusinessofmining.com

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