| |
BHP files Rio takeover bid with EU
Reuters
Posted: Fri, 30 May 2008
[miningmx.com] -- BHP Billiton, the world's biggest mining group, has formally filed with the European Commission for clearance to take over rival Rio Tinto, a Commission list of M&A cases showed on Friday.
The Commission, the European Union's executive arm and also its antitrust regulator, set a deadline of July 4 for consideration of the deal.
By that date the Commission must either approve the deal on competition grounds, open an in-depth investigation, or permit a short extension.
Rio Tinto spurned BHP's all-share offer, currently worth more than $180 billion, shortly after BHP announced it on Feb. 6. The filing was delayed for months during pre-filing talks with the European Commission.
Analysts say the most contentious area is likely to be iron ore, since the combined firm would control around a third of seaborne trade in the raw material for making steel.
BHP Billiton shares in London were down 1.8 percent at 1,924 pence, and Rio Tinto's were down 1.7 percent at 6,076p at 1022 GMT.
EU steel firms have vowed to fight the merger, worried a combined group would have undue pricing power over iron ore, contract prices of which have recently increased.
BHP's bid is a prominent example of a trend in the past few years for
metals and mining industry groups to buy running operations rather than start one from scratch.
There has been also been repeated speculation by analysts that resource-hungry China would put money into BHP as a hedge against rising commodity prices.
In the meantime, Rio Tinto has continued to forge ahead with new projects, including the exploitation of the world's next giant iron ore deposit in the company's Simandou project in Guinea.
Rio has also moved in to the large gold-copper Oyu Tolgoi deposit in Mongolia by teaming up with Canadian exploration firm Ivanhoe.
| |
