BHP's Potash Bid Only Needs China Approval If Anti-Monopoly Criteria Met

BHP Billiton Ltd.’s $40 billion bid for Potash Corp. of Saskatchewan Inc. only needs approval from the Chinese government should it meet the criteria set in the nation’s anti-monopoly law, the Ministry of Commerce said.

“If the deal falls under article 13 of the law, they should submit an application for review,” the ministry’s spokesman Chen Rongkai said in a phone interview. “I have no information about whether they meet the criteria or whether they have submitted an application.”

BHP, the largest mining company, is seeking to buy the world’s biggest fertilizer producer as global food demand is expected to rise with the economic recovery. China is the largest user of potassium fertilizer and relies on imports for more than half its needs.

Article 13 of China’s anti-monopoly law wants to stop companies that are competing in the same industry from reaching agreements that allow them to dictate price changes, limit production or sales, segregate sales or raw material markets, restrict the purchase of new technology or development of new skills and products or coordinate in stopping other transactions.

Article 14 of the anti-monopoly law also states that it wants to stop sellers and buyers from determining minimum sales prices or dictating third-party prices.

Separately, Chen said he has no information on the ministry’s review process regarding an application from BHP and Rio Tinto for their proposed iron ore joint venture in Western Australia.

The ministry has received the application, Chen said May 5.

--Helen Yuan. Editors: Tan Hwee Ann, Matthew Oakley.

To contact the Bloomberg News staff on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

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