Russia’s Phosagro to consult Canada on Potash bid

By Reuters
Posted Nov. 16, 2010 at 6:25 a.m.

Russia’s Phosagro, chaired by an ally of Prime Minister Vladimir Putin, said on Tuesday it would consult with Canada’s government on a bid for Potash Corp., which has its offices and CEO in Northbrook, after BHP Billiton withdrew.

“Phosagro intends to consult with all interested parties, including the government of Canada, on the advisability of a bid to buy Potash Corp as an alternative to BHP Billiton’s previous bid,” the Russian fertiliser producer said in an e-mailed statement.

Chairman Vladimir Litvinenko told Reuters after the potential Phosagro bid emerged that a BHP Billiton takeover of Potash Corp would threaten Russia’s position on a key export market.

But BHP Billiton withdrew its bid after resistance from the Canadian government, and Phosagro is unlikely to fare any better with Ottawa, analysts said.

Phosagro has said it is in talks with Russian and foreign banks on financing for a bid, but Vedomosti newspaper reported on Tuesday citing a source that Russia’s biggest bank, state owned Sberbank, had not been approached by Phosagro.

Russian potash producers Uralkali and Silvinit, together with partner Belaruskali, control up to 45 percent of the global potash market. Uralkali and Silvinit have shareholder interests in common and are likely to merge.

Analysts have said Phosagro’s public interest in Canada’s Potash Corp. may signal covert interest in a role in the domestic potash industry and possibly in an Uralkali-Silvinit merger.

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