BHP Billiton head office in Melbourne.MICK TSIKAS
The Potash Corp. of Saskatchewan Inc. saga dominated Canadian politics for weeks, but Down Under it's no worries.
Other than the ruffled feathers inside BHP Billiton Ltd. corporate headquarters in Melbourne, finding genuine anger among Australians about the Canadian government's decision to block BHP's hostile takeover bid for Potash Corp. is a challenging task.
Inside the business community and beyond, Australians are taking the Canadian political rebuff of their largest company in stride.
"I don't think anyone here is looking at the Canadians with any animosity at all," said Chris Weston, an institutional dealer at IG Markets in Melbourne.
"The BHP bid was rejected on individual grounds, and while the Canadians are concerned with losing their key national assets, I don't think this was due to the predator or nation involved. Certainly relations with Australia and Canada were not tarnished," he added.
With a capital markets structure and resource-driven economy that is dependent on foreign investment, Australians have wrestled with the same concerns as Canadians about proposed buyouts of its major companies.
But unlike Ottawa, which has blocked just two foreign takeovers (including Potash Corp.) since the Investment Canada Act was established in 1985, the Australian government has been less shy about turning away foreign suitors.
Most famously, Canberra stopped Royal Dutch Shell PLC'S bid for Woodside Petroleum Ltd. in 2001, deeming the company's oil holdings a strategic asset and a foreign takeover not in the "national interest." In 2009, Australia also refused China Minmetals' initial bid for financially troubled Oz Minerals. The government blocked the Chinese state-backed company from owning Oz's Prominent Hill copper and gold mine in South Australia, although it did allow Minmetals to buy most of Oz's other assets.
Now, Australians are once again debating the merits of another foreign takeover bid - an $8.4-billion (U.S.) offer for the Australian Stock Exchange (ASX) by Singapore Exchange Ltd.
Many business executives have argued in favour of the friendly deal, which is being promoted as a merger between the two exchanges. They say it will improve business ties with Singapore, one of Australia's largest trading partners, and raise the profile of Australian companies in Asia.
Still, there is a good chance that the takeover will be turned down by Australia's Foreign Investment Review Board or by Parliament. The Australian Greens party is strongly opposed to the deal and approval may be politically unpalatable for Prime Minister Julia Gillard's fragile minority government.
"This is very similar to BHP and Potash," said Rick Yeates, a veteran mining executive and director of nickel producer Perth-based Western Areas NL. Mr. Yeates believes the ASX deal makes commercial sense. However, he said "there is a parochial element that is saying 'this is one of our prime financial institutions that you want to sell to Singapore.' Politically, I don't think it will happen."
It is amid this domestic political backdrop that even BHP's own executives have refused to publicly criticize the Canadian government's decision.
At BHP's annual meeting this week, chairman Jac Nasser cited a rising tide of global protectionist sentiment for the company's inability to secure both Potash and a major iron ore joint venture with rival Rio Tinto Ltd. But Mr. Nasser also said that Canada's decision had not set a dangerous precedent that would hinder cross-border mergers and acquisitions.
Privately however, BHP managers are more direct when asked why they thing Ottawa blocked the bid despite an unprecedented raft of concessions and promises the mining giant was willing to make.
"It was purely political," said one senior executive. "Purely political."