Chengdong Investment Corp. a unit of sovereign wealth fund China Investment Corp. (CIC) took a 12.5% stake in OAO Uralkali, the world’s biggest producer of potash. The stake was acquired for an exchange of bonds for share in the potash producer. China buys approximately 20% of the $20 billion global potash supply and as China expands its global reach to attain food security for its population, Bloomberg states that the country has bid $10.3 billion this year alone on agricultural assets including chemicals and food. CIC’s stake in Uralkali would equal approximately 14% once Uralkali completes a pledged cancellation of 12.4% of its shares held as treasury stock following a buyback program. Wayne Brownlee, chief financial officer of Potash Corp. North America’s largest fertilizer producer says that he doesn’t see Uralkali giving China preferential pricing as the industry still has significant entry barriers.
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