Australian mining giant BHP Biliton Ltd. Has won its first regulatory approval – from U.S. antitrust authorities – in its $39 billion dollar hostile bid to take over Canada’s Potash Corp., the world’s largest producer of potash, a key crop nutrient used in fertilizer.   

BHP has announced that the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice have terminated the HSR mandatory waiting period early, permitting BHP to proceed with its bid.  BHP still requires antitrust clearance from other regulatory authorities, including Canada’s Competition Bureau, which has sought further information regarding the proposal, and the Investment Canada review, for which BHP must prove its offer is of “net benefit to Canada.”  

Despite these remaining regulatory hurdles, BHP has stated that it “remains confident” that it will secure the remaining antitrust approvals necessary to complete its takeover.

In its bid, BHP seeks to acquire all of the issued and outstanding common shares of Potash along with any associated rights under Potash’s Shareholder Rights Plan.  BHP offered Potash shareholders $130 per-share, a 20 percent premium over the NYSE August 11 closing price.  Potash rejected BHP’s offer as too low, commenting that BHP’s bid was “grossly inadequate” and “highly opportunistic.”  Potash’s board of directors has publicly encouraged its shareholders to reject the bid.  

To further block BHP from acquiring Potash, Potash set up a “poison pill” policy on its shares to block any bidder from completing a hostile takeover.  The “poison pill” is triggered by an unasked-for purchase of over 20 per cent of its shares.  In that instance, Potash would automatically flood the market with cut-price shares that would be offered to every shareholder other than the unsolicited bidder.  This has the effect of diluting the value of the unsolicited bidder’s stake. 

Potash has also filed a complaint in federal court alleging that BHP has engaged in various federal securities violations.  Specifically, Potash alleges that BHP has made false and misleading statements to manipulate stock prices and mislead stockholders.  Potash claims that BHP attempted to erode the stock prices by disseminating phony plans to enter the potash industry, which, if true, would flood the market with potash and devalue Potash’s stock.  

BHP responded to the allegations by saying that “this lawsuit is entirely without merit and we will contest it vigorously.”  BHP further stated that Potash seeks to “deprive its shareholders of a fully financed all-cash offer” and that the lawsuit will not “interfere with or delay our offer.”  

BHP’s offer has been extended to November 18, 2010 to allow completion of the regulatory review in Canada.

Employees at six high-tech companies can be expecting more cold calls with job offers, thanks to a settlement engineered by the U.S. Department of Justice (“DOJ”).

DOJ’s Antitrust Division has reached a settlement agreement with Apple, Google, Intel, Adobe, Intuit, and Disney’s Pixar unit, which will enable those companies to compete more vigorously for each other’s employees.  According to the DOJ, the settlement “prevents them from entering into no solicitation agreements for employees.”  In other words, no more agreements to refrain from cold-calling competitors’ workers.

DOJ has filed an antitrust complaint in U.S. District Court for the District of Columbia, along with the proposed settlement, which, if approved by the court, would resolve the lawsuit.

The complaint alleges that the six companies entered into agreements that restrained competition between them for highly skilled employees.   The agreements between Apple and Google, Apple and Adobe, Apple and Pixar and Google and Intel prevented the companies from directly soliciting each other’s employees.   An agreement between Google and Intuit prevented Google from directly soliciting Intuit employees.

The oldest of the agreements dates back to 2006.  If approved by the court, the agreement will govern the companies’ activities for five years.

Reports that a settlement between Justice and tech companies might be in the works began to surface last week.  And reports that the employment practices might have violated antitrust law began circulating last year. The now defunct policies allegedly violated antitrust laws by restraining competition among workers in high-tech fields, limiting their ability to move up in their careers, and ultimately slowing the pace of innovation and efficiency in technology markets. 

Incentives exist for technology companies to try to hang onto their workers, given that companies often collaborate with each other on technology projects, which gives workers plenty of opportunities to get to know potential new bosses.  Even so, DOJ has indicated that it has no plans to file similar suits against such companies as Yahoo, Microsoft, IBM, and Genentech.

Online and other private gambling companies are looking forward to their winnings as a result of the ruling by the European Court of Justice in Luxembourg (ECJ) that Germany’s state-run gambling monopoly violates European Union law.

The EU’s highest court has ruled that Germany’s justification for the state monopoly on gambling rang hollow and struck down the law in a landmark decision that opens the door to the German market for private betting companies, including online companies.

Under a 2008 bill, Germany allows only state lotteries – a gambling monopoly that Germany sought to justify by arguing that it protects consumers from the harm of gambling and prevents gambling addictions.

However, the ECJ labeled this justification “unjustifiable” in light of the “intensive advertising campaigns” undertaken by the state-run gambling companies and the addictive automated gambling machines also allowed under Germany’s monopolistic rules.  The ECJ opined that, “[i]n such circumstances, the preventive objective of that monopoly can no longer be pursued, so that the monopoly ceases to be justifiable.” In addition, the ECJ noted that Germany’s gambling legislations is “contrary to the fundamental freedoms of the EU.”

This ruling comes after the German legislation was challenged in regional courts by online gambling companies; the regional courts then asked the ECJ for a ruling on the legality of the German monopoly.  This ruling is in stark contrast to previous ECJ rulings deeming state lotteries in other EU states legal because of their goal of limiting the negative consequences of gambling on society.

The consequences of this ruling could be far-reaching in Germany, where the state-run lottery and betting companies have earned billions in euros.  In addition to staunching the flow of gambling income to the state, this ruling could redirect those billions to private gambling companies and allow private gambling companies to flourish in a market previously closed to them.

Although the full consequences of the ruling are yet to be seen, the European Gaming and Betting Association welcomed the ruling as part of “much-needed reform” in Germany.   “Other member states have opened or are opening their markets. They show that consumers can be better protected in a market that is both regulated and open to competition,” it said.

The European Union’s antitrust regulator is setting its sights on a $200 million deal for a partial sale of an insecticide business owned by Sara Lee, the food company, to S.C. Johnson & Son, which chiefly makes home-care products.

Both companies are based in the United States, and a European Commission press release acknowledged that the transaction may not “have a Community dimension.”  Even so, the Commission continued, the deal may “affect[] trade within the EU market and threatens to significantly affect competition within” countries that requested the investigation. 

The European Commission’s procedures did not trigger an automatic investigation of the deal.  Rather, the regulator began it after receiving requests from half a dozen European countries, including France, Greece, Italy, Belgium, the Czech Republic, and Spain. 

This isn’t the first time that the Europeans have looked at Sara Lee’s dealings.  The Commission is currently looking into a proposed sale of Sara Lee’s body care unit to Unilever, and is expected to rule by the end of October.  In June, the Commission also cleared the sale of Sara Lee’s air freshener unit to Proctor Gamble.  The deals are part of Sara Lee’s plan to sell off businesses unrelated to its core food business.

The insecticide investigation could prove costly to Johnson, which at the end of August finalized its largest debt offering ever, for $550 million in bonds, which were partially slated for the purchase of Sara Lee’s insecticide business.

The European Commission has opened a probe to investigate whether marine-insurance agreements among ship owners in the International Group of P&I Clubs (“IG”) restrict competition by blocking rivals from the market. 

The IG is comprised of 13 worldwide “protection and indemnity” clubs of ship owners, which together provide insurance to approximately 93 percent of ocean ships.

The Commission is concerned that certain provisions in the IG’s marine-insurance agreements may restrict competition by blocking commercial insurers or other mutual P&I insurers from the relevant market by restricting access to ship owners.  The Commission stated that it “fears that the provisions at stake in the agreements … may harm ship owners and the insurers that are not members of the IG.”

The provisions at issue involve claim-sharing and joint-reinsurance agreements as well as rules which govern the contractual relationships between the clubs and their members. 

The probe follows the recent expiration of a 10-year antitrust exemption enjoyed by the P&I agreements under European Union regulations.  Although the EU in April again created certain antitrust exceptions for the insurance industry, the P&I agreements were not included among them because their market share rises far above the 20-25 percent maximum provided for by EU competition regulations.

In response to the investigation, the IG stated that “there have been no relevant or material changes to the arrangements or in the market for P&I cover” since regulators last reviewed the agreements in 1999. 

The Commission launched the investigation on its own initiative, even though there have been no complaints regarding these agreements.  There is currently no deadline for completing the investigation.