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In this photograph illustration a bar of Cadbury's Dairy Milk is seen besides the Kraft logo

Matt Cardy/Matt Cardy/Getty Images)

The glory days of the old-fashioned takeover hunt are numbered.

Since the advent of easy takeover money in the 1980s, acquiring a company wasn't much more complicated than leaping on a horse and chasing down a fox. Once deal terms were out, short-term investors piled into the stock and began braying for the target company to be acquired. Any buyer with a reasonable premium could be fairly certain of attracting enough shareholder support to win the day.

But just as the fox hunt is disappearing, the old-school takeover is succumbing to political and social pressures that are changing the rules. It takes more than shareholder lust to close a deal; a growing array of stakeholders must be convinced of a takeover's merits.

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This is one of the key lessons of Ottawa's decision to halt BHP Billiton Ltd.'s takeover play for Potash Corp. of Saskatchewan Inc. It was only the second of 1,600 acquisitions to have been blocked since the Investment Canada Act came into force in 1985. And it brought Canada into a growing circle of nations that have balked at a major foreign acquisition.

After years of embracing the mantra that globalization is good business, political leaders are now beginning to insist that globalization must be good for local economies.

This shift has been triggered by a number of events. Takeovers are getting bigger and the targeting of once untouchable national giants, such as Potash Corp., are inflaming nationalist nerves. Australia has quietly given a cold shoulder to more than a few outsiders coveting its mineral riches; it's a safe bet the country would block any takeover of BHP.

U.S. rule makers have made it clear they oppose takeovers by state-owned companies from such countries as China. And Britain is threatening to tighten its takeover rules after U.S. giant Kraft Foods reneged on a promise and closed a local factory after acquiring British candy maker Cadbury last year. British Business Secretary Vince Cable fired this dark warning when he unveiled proposed changes last fall: "Capitalism takes no prisoners and kills competition where it can."

Compounding matters is an erosion of trust in business. In the wake of banking failures, major business scandals and oil leaks, corporate promises have less currency. In Canada, undertakings by acquirers such as U.S. Steel or Brazil's Vale turned out to be worth not much more than the paper they were written on when the Canadian operations and staff were shut down or slashed shortly after acquisitions.

As a result of such failures, businesses are now seen as a "major cause of social, environmental and economic problems," wrote Michael Porter and Mark Kramer in the latest Harvard Business Review.

The authors call for corporations to rebuild trust by expanding their focus from shareholders by "sharing value" with a broader constituency of stakeholders in their communities. They are not talking about charity, but corporate strategies and programs that jointly spur local employment and community life by helping to improve job training, education, infrastructure and the environment. Building local value, they say, is a new cost of business.

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Socialist clap trap? If it is, then the new poster boys of socialism are Google, IBM, General Electric and Wal-Mart, which according to the authors, have a variety of programs under way to meet those local goals.

BHP's perceived indifference to the local impact of its potash takeover fatally poisoned its bid. The failure has sent a strong message to would be foreign buyers that they need a new playbook for sensitive major takeovers. That message was heard by the London Stock Exchange when it offered huge governance powers to its proposed merger partner TMX Corp.

It was also heard by PetroChina International Investment Co. when it slapped down more than $5-billion for a natural gas venture with Encana Corp.

By partnering with Encana, rather than devouring it, the Chinese heavyweight is making a long- term play to share its capital on a costly natural gas venture. If it goes well, PetroChina will build credibility with the oil patch, local communities and politicians. In time, maybe it will win enough support to hunt down the entire fox.

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