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Sinochem seeks Ottawa's support for Potash Corp bid: media

by Staff Writers
Ottawa (AFP) Oct 8, 2010
China's Sinochem is seeking assurances from the Canadian government that its bid to acquire Potash Corp will be "fairly considered," before it proceeds, a major Canadian daily said Friday.

"Sinochem won't proceed with a bid for the world's largest fertilizer firm unless it receives a positive signal from Ottawa," said the daily Globe and Mail, citing sources close to the state-owned enterprise.

"That is the most important question," one source was quoted as saying. "Ultimately, the prime minister's office will be involved in the decision."

A consortium led by the Chinese company is considering mounting a rival offer that would top a 40-billion dollar hostile takeover bid by Anglo-Australian mining giant BHP Billiton in August.

To bolster its chances of success, it is reportedly ready to make "extraordinary concessions" to the Canadian government, such as giving Ottawa a veto over any major changes at Potash Corp and maintaining potash sales through Potash Corp's marketing arm Canpotex to maintain higher prices.

China, a major importer of potash, which is used to make fertilizer, has been uneasy about the BHP bid as it already buys large quantities of the company's iron ore.

A study released Monday showed a BHP takeover of Potash would have few negative impacts for Canada but its acquisition by Sinochem could result in a huge drop in royalties to Saskatchewan province, where the mines are found.

"If an acquirer chooses to ignore market disciplines and compete for market share through higher volumes and lower prices -- unlikely in the case of BHP but likely in the case of Sinochem -- the adverse fiscal impact on the province could be very significant," said the Conference Board of Canada study.

The net effect would be a 5.7-billion dollar reduction in taxes and royalties over a 10-year period, it said.

BHP would not likely pursue such a strategy, the report concluded, "because it would not be the best way to maximize the return on their investment."




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Anti-GM crop petition tops million signatures
Brussels (AFP) Oct 6, 2010
More than one million signatures have been gathered in a legal bid to "freeze" GM crop cultivation in the European Union, but a Brussels official said Wednesday the complaint would be passed to "political" advisers. Environmental campaigners Greenpeace and Avaaz announced that the online petition target had been crossed, seeking to use a new citizen charter created under the European Union's ... read more

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