4 Nov 2010

BHP takeover bid receives setback from Canada

1:07 pm on 4 November 2010

Canada has dealt a blow BHP Billiton's $US40 billion bid to buy Canadian-based Potash Corporation.

The statement from Investment Canada says that the buyout of the world's biggest fertiliser supplier does not provide any benefit to Canada.

But BHP now has 30 days to convince Canada the deal should be approved before the government makes its final decision.

The decision comes as a group of investors led by a Russian fertiliser firm, PhosAgro, says it's preparing a rival bid for Potash.

Potash is an essential ingredient in fertilser, and Russian producers fear the BHP takeover could hamper their access to the commodity.

It's become a hot political issue in Russia, where droughts damaged the country's wheat crops and exports earlier this year.

Many analysts expect the Russian government to provide financial help to PhosAgro to buy Potash.