BHP Billiton Begins Share Buyback

BHP Billiton is trying to salvage the situation after its Canadian Potash bid fell through. The Chief Executive Officer Marius Kloppers must be disappointed after this third failed proposition. The first two being related to the hostile bid for Rio Tinto and the following iron ore joint venture with Rio Tinto in the Pilbara region of Australia.

Marius Kloppers had already raised loans worth $45 billion in anticipation of the acquisition of the world’s largest fertilizer company. The proposal received great resistance from politicians and investors alike. Eventually the Stephen Harper led government said that the sale would not provide a net benefit to Canada.

Now that the plan has been scrapped for good by the Canadian government the mining company has begun a share buyback. The Melbourne based company has reactivated the $4.2 billion part of its $13 billion share buyback program. Analysts at Morgan Stanley feel that BHP Billiton will spend the next two year buying back shares worth $25 billion.

BHP Billiton has not completely given up on the fertilizer industry and will continue to develop its Jansen potash project in Canada. This would work out to be the world’s largest potash mine in a few years.