The news at a glance
Potash Corp.: Canada blocks a foreign bid; Air safety: Qantas grounds Airbus jets; Entertainment: Court loss clouds EMI’s fate; Automobiles: Chrysler reports loss but raises forecast; E-retailing: Amazon goes diaper shopping
Potash Corp.: Canada blocks a foreign bid“Bowing to political pressure to protect a rich natural resource,” Canada’s Conservative government has blocked an Australian mining company’s takeover bid for Potash Corp., said Rob Gillies in the Associated Press. BHP Billiton had offered $38.6 billion for the Saskatchewan-based company, which controls a quarter of the world’s reserves of potash, “a fertilizer ingredient critical to the world’s food supply.” Canadian Prime Minister Stephen Harper decided to oppose the deal, despite his reputation as a free-market conservative, after political leaders in Canada’s western provinces expressed opposition. Harper’s minority government needs their support to remain in power.
The failed deal might be “the turning point at which globalization went into retreat,” said Alan Beattie in the Financial Times. Harper’s government has justified its actions with a claim that securing Canadian supplies of this vital raw material “is not just a commercial convenience but a strategic imperative.” But such talk “can be used as a shield to advance rather more down-to-earth considerations.” Along with China’s unofficial embargo on rare-earth minerals, the demise of the Potash deal can be seen as “the beginning of a trend toward natural resource nationalism.”
Air safety: Qantas grounds Airbus jetsQantas Airlines has grounded its six Airbus A380 passenger jets after its inspectors discovered oil leaks in the Rolls-Royce engines of three planes, said Meraiah Foley in The New York Times. The decision followed last week’s “dramatic midair explosion” of an engine, which forced a Qantas jetliner with 450 passengers aboard to make an emergency landing in Singapore. Inspectors found signs of premature wear in the engines, suggesting that Rolls-Royce’s efforts to shave weight off the engines may have compromised their safety.
Entertainment: Court loss clouds EMI’s fateEMI may soon be a takeover target, now that its owner’s lawsuit against Citigroup has failed, said Kristen Schweizer in Bloomberg.com. British private-equity group Terra Firma Partners, which bought EMI for $6.5 billion in 2007, sued Citigroup last December, alleging that Citi, in its role as Terra Firma’s consultant, had deceived it into overbidding for the music label. Last week a British court ruled against Terra Firma, which remains burdened by takeover debt. Terra Firma’s creditors are now expected to force a sale of EMI, whose back catalogue includes the Beatles, Pink Floyd, and Deep Purple.
Automobiles: Chrysler reports loss but raises forecastChrysler Corp. reported a modest third-quarter loss of $84 million as it “continues to fight its way back from bankruptcy to profitability,” said Alisa Priddle in The Detroit News. The carmaker, now owned by Italy’s Fiat, generated an operating profit of $239 million in the quarter, which was offset by $308 million in interest costs. Chrysler now expects its full-year operating profit to hit $700 million, up from an earlier forecast of $200 million.
E-retailing: Amazon goes diaper shoppingAmazon.com added to its retailing empire this week, buying Quidsi, the parent of Diapers.com and Soap.com, for $500 million, said Heather Struck in Forbes.com. The acquisition follows Amazon’s purchase last year of Zappos.com, the online shoe retailer “that built a reputation on fast, affordable shipping” and stellar customer service. “Quidsi has succeeded with Diapers.com in a similar way.” The deal heightens Amazon’s rivalry with Wal-Mart and Target in the battle to dominate consumer staples