- A combination of Potash (POT +1%) and Agrium (AGU +1.6%) into a fertilizer giant may find a friendlier regulatory ear in the companies' home country of Canada than it would in the United States, competition lawyers say, but a U.S. rejection would kill the deal just the same.
- Canada's Competition Bureau may be kinder since its regulators focus more on the potential for achieving efficiencies of scale -- the better to strengthen companies usually already operating in a smaller market.
- But significant operations in the U.S. mean the FTC or Justice Dept. could take a harder line on what Potash/Agrium would mean for pricing power. Such a merger would consolidate 62% of North American potash production into one company and reduce the market largely to two companies overall.
- Earlier this year, Canadian regulators approved a deal between Superior Plus and Canexus on the efficiency argument, but U.S. denial scuttled the deal.
- Just yesterday, agricultural producers representative Norm Hall compared the situation to "the movie 'Mad Max' -- one company owns everything," suggesting they'd head to the Competition Bureau to oppose a deal.