The Canadian Competition Bureau has put its stamp of approval on the Potash Corporation of Saskatchewan and Agrium merger, but the tie-up may still face delays as the companies work to earn the approvals of other regulators around the world.
The CCB’s approval means that it has concluded that the proposed transaction is not likely to lead to a substantial lessening or prevention of competition with respect to potash fertilizer, phosphate fertilizers, and nitric acid. The CCB found that global prices of potash are correlated with prices in Canada and that customers can source potash from multiple suppliers.
While this is an important first time for the merger to go through, more steps are required, and as a result, the company recently said that it expects the merger to close in the fourth quarter and not the third quarter as previously expected.
After the CCB announced that it had approved the merger, Potash Corp. said that it may sell its stake in Chilean lithium miner SQM to secure approval for the merger. SQM is one of the world’s biggest lithium producers.
Potash and Agrium still need to obtain approval from India and China as well as the United States. Recently, regulators in India and China requested for Potash to divest its offshore interests for their merger to be approved. While neither Potash nor Agrium has a physical presence in India, they supply potash to the countries through Canpotex Ltd. The sale of SWM would put the company closer to meeting the requests of the regulators.