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Sinochem seeks state help to back bid
By Zhou Xin and Alan Wheatley |
September 20, 2010, Monday
|
Print Edition
Print Edition
CHINESE chemical conglomerate Sinochem Group has formally asked the government to back a bid for Canada's Potash Corp, a local newspaper reported yesterday.
The Economic Observer cited sources close to the deal as saying that, according to a preliminary assessment, Sinochem would need US$40 billion to US$60 billion to trump a US$39 billion hostile offer by BHP Billiton for Potash Corp.
The amount would be too much for Sinochem, which reported US$25 billion in total assets at the end of 2009, the Beijing-based weekly newspaper cited analysts as saying.
In its application to the government, Sinochem argued that China should back a bid for the Canadian firm because potash is key to the country's national food security, the paper said.
The newspaper story chimes with a report last Friday by the Globe and Mail in Toronto that Sinochem was trying to drum up support for a Chinese-led bid for Potash Corp.
Sinochem is the parent of China's largest fertilizer company, Sinofert.
Sources told Reuters last week that Sinochem Corp had invited Singapore government's Temasek Holdings to join a consortium exploring a bid for Potash Corp.
China, which buys about 7 percent of the output of Potash Corp, fears a BHP takeover might raise the cost of fertilizers that it will need to produce food for its huge population in coming years.
China's Ministry of Commerce said last week that it would monitor closely but that it had not received any material or information from a Chinese enterprise regarding interest in the deal.
The Economic Observer cited sources close to the deal as saying that, according to a preliminary assessment, Sinochem would need US$40 billion to US$60 billion to trump a US$39 billion hostile offer by BHP Billiton for Potash Corp.
The amount would be too much for Sinochem, which reported US$25 billion in total assets at the end of 2009, the Beijing-based weekly newspaper cited analysts as saying.
In its application to the government, Sinochem argued that China should back a bid for the Canadian firm because potash is key to the country's national food security, the paper said.
The newspaper story chimes with a report last Friday by the Globe and Mail in Toronto that Sinochem was trying to drum up support for a Chinese-led bid for Potash Corp.
Sinochem is the parent of China's largest fertilizer company, Sinofert.
Sources told Reuters last week that Sinochem Corp had invited Singapore government's Temasek Holdings to join a consortium exploring a bid for Potash Corp.
China, which buys about 7 percent of the output of Potash Corp, fears a BHP takeover might raise the cost of fertilizers that it will need to produce food for its huge population in coming years.
China's Ministry of Commerce said last week that it would monitor closely but that it had not received any material or information from a Chinese enterprise regarding interest in the deal.
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