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Nutrien will sell its SQM shares next Monday and mark the end of an era

The largest business in recent years in the local market has the day and time to materialize.

At noon yesterday, the Canadian company Nutrien (a continuation of Potash Corp) registered on the Santiago Stock Exchange an auction of over 62 million SQM series shares, which account for almost 24% of its property. And he set up the operation on Monday, December 3, at 9:15, which will be held at the wheelbase of the country's main stock exchange.

This package should be acquired by Chinese Tianqi, which will be a landmark stage: Nutrien will leave SQM ownership 15 years later, in which he named the members of the board of directors and took part in the decision-making of the company, and the Asian firm will take its place.

The transaction, led by Bancile Corredores de Bolsa, will have a minimum price of $ 65 per share, so the expected amount will be $ 4,066 million.

Thus, if there is nothing surprising, this operation, marked by contradiction, will be sealed.

Compliance program

After the Free Competition Defense Court (TDLC) approved the agreement between the National Economic Prosecutor’s Office (FNE) and Tianqi in early October, the latter entered into the ownership of the SQM, new negotiations began.

According to the PULSO published in October, this is a project that China and Chile are doing in the so-called compliance program, which consists of a compliance protocol that Tianqi agreed with FNE and which seeks to limit the risk of illegal coordination between directors. both companies.

One of the most relevant details to protect is related to the potential illegal exchange of information related to the lithium market, where both companies are the largest players in the world.

Thus, sources who know about the process are ready for the next year: in April 2019, three directors named Tianqi will be accepted at SQM, after which the Chinese will be given 60 calendar days to submit their proposal to the board of the Chilean mining the company.

This process is qualified by experts as “substantial” and even more important than TDLC’s own decision. It should be noted that this new step is considered mainly at the level of lawyers specializing in free competition and corporate law.

In this context, the comments of the sources, the Pampa group, representing the interests of Julio Ponce, who controls SQM through cascading companies, could be promoted in such a way as to improve, from his point of view, the terms of the agreement, which made it possible to enter Tianqi into SQM.

The history of the struggle

In May of this year, an agreement was announced between Nutrien and Tianqi, through which the latter will buy the participation of the first in SQM.

The following month, the FNE announced the opening of an investigation to assess the possible implications for the free competition that the operation may bring. This, after the complaints lodged by Corfo and Senator Alejandro Gilier.

Thus, the transaction was frozen when the investigation was extended. In parallel, at the end of August, FNE announced that it had reached an out-of-court agreement with Tianqi, where it had established various measures to mitigate the risks that an operation in free competition could entail.

These measures include the fact that Tianqi will not select directors, managers or employees of his company to participate in the SQM board of directors and that neither the Chinese company nor its directors will be able to influence or intervene in the interests of Tianqi or to the detriment of the interests of the company. Chilean prey.

After this agreement was accepted in TDLC for approval. In the middle of this year, in September, allegations were made in which the Pampa group opposed the agreement.

Despite this, TDLC approved the agreement in early October, after which the group Pampa returned to the prosecution, but again their attempts were frustrated.

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