China may probe BHP takeover of Potash
CHINA may launch an anti-monopoly probe into BHP Billiton's US$39 billion bid for Canada's Potash Corp, the China Business News said yesterday, citing a source familiar with the matter.
China will also review the merger of two Russian potash firms - Uralkali and Silvinit - given the major impact the two deals would have on China, the newspaper cited the unnamed source as saying.
The report was another indicator that China, as the world's biggest importer of fertilizer, is wary of further concentration in the market, following BHP Billiton's launch of a hostile bid for Potash Corp last month.
But it was unclear what steps, if any, Chinese regulators could take in opposition to the bid.
BHP has said the deal only needs approval from regulators in Canada and the United States, where Potash Corp sells around half its production.
China buys around 7 percent of the output of Potash Corp, which controls around one-fifth of world production of the key crop nutrient. Potash demand in the country has been growing by around 5-8 percent a year, faster than other fertilizers.
BHP Billiton does not currently produce any potash but does have potash resources it could develop in the future, including the massive Jansen project in Canada. The mine would begin producing in 2016 at the earliest, if the company approves development in 2011.
China's largest fertilizer distributor, Sinofert Holdings Ltd, said last week that it was worried about the impact that a BHP deal would have but would not say if its parent, Sinochem, was planning a rival offer.
Government departments and Sinochem Group have held meetings recently to review the possible impact the two takeovers could have on China and about possible countermeasures, the source said.
BHP may have to submit paperwork on the deal to China's anti-monopoly regulators.
Under Chinese law, the nation's regulators have jurisdiction over a foreign merger if two of the parties each have over 400 million yuan (US$58.7 million) in sales in China in the last fiscal year and if their worldwide sales surpass 10 billion yuan.
China will also review the merger of two Russian potash firms - Uralkali and Silvinit - given the major impact the two deals would have on China, the newspaper cited the unnamed source as saying.
The report was another indicator that China, as the world's biggest importer of fertilizer, is wary of further concentration in the market, following BHP Billiton's launch of a hostile bid for Potash Corp last month.
But it was unclear what steps, if any, Chinese regulators could take in opposition to the bid.
BHP has said the deal only needs approval from regulators in Canada and the United States, where Potash Corp sells around half its production.
China buys around 7 percent of the output of Potash Corp, which controls around one-fifth of world production of the key crop nutrient. Potash demand in the country has been growing by around 5-8 percent a year, faster than other fertilizers.
BHP Billiton does not currently produce any potash but does have potash resources it could develop in the future, including the massive Jansen project in Canada. The mine would begin producing in 2016 at the earliest, if the company approves development in 2011.
China's largest fertilizer distributor, Sinofert Holdings Ltd, said last week that it was worried about the impact that a BHP deal would have but would not say if its parent, Sinochem, was planning a rival offer.
Government departments and Sinochem Group have held meetings recently to review the possible impact the two takeovers could have on China and about possible countermeasures, the source said.
BHP may have to submit paperwork on the deal to China's anti-monopoly regulators.
Under Chinese law, the nation's regulators have jurisdiction over a foreign merger if two of the parties each have over 400 million yuan (US$58.7 million) in sales in China in the last fiscal year and if their worldwide sales surpass 10 billion yuan.
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