China’s Sinochem Group has asked for government support to bid for Canada’s Potash Corp.
A preliminary assessment shows Sinochem would require $40bn-60bn to beat a $39bn hostile offer by BHP Billiton for the company, while Sinochem’s total assets were reportedly $25bn in 2009.
In a formal application to the government, Sinochem has argued that the government should support its bid for Potash Corp as potash is key to China’s national food security, reports The Economic Observer.
Earlier, Sinochem invited Singaporean state investor Temasek Holdings to join a consortium exploring the Potash bid.
China buys about 7% of production from Potash Corp, and fears a takeover by BHP Billiton might increase the cost of fertiliser.