22 November 2007
BHP to push ahead with Rio takeover plan

Associated Press Seoul BHP Billiton Ltd. CEO Marius Kloppers said he intends to achieve a proposed takeover of rival mining company Rio Tinto Ltd., a South Korean media report said Wednesday.

Kloppers, in an interview with the Maeil Business Newspaper, said a takeover of Rio Tinto would achieve efficiencies by reducing overlapping investments in mines, and other assets and would be good for South Korean steel makers.

BHP Billiton, the world's biggest mining company, headquartered in Melbourne, Australia, is seeking to buy Rio Tinto. But its US$150 billion proposal was rejected earlier this month.

Steel industry federations in Japan and China oppose the proposed buyout. The China Iron & Steel Association said this week such a deal would create a monopoly on iron ore and be unfair for steel producers.
The Japan Iron and Steel Federation criticized BHP Billiton's proposal Monday, calling it undesirable for industrial competition and pricing.
The two companies together control 60 percent of Japan's raw materials imports, the federation said.

Also Monday, the International Iron and Steel Institute urged in a statement from Brussels that relevant regulatory authorities review any combination of BHP Billiton and Rio Tinto.

"This merger is not in the public interest and should not be allowed to proceed," said IISI Secretary General! Ian Christmas in the statement.

Kloppers told the South Korean newspaper that despite opposition from global steel companies BHP Billiton has been trying to explain to them the benefits that would come from the takeover.He said that while the proposed deal is complicated and will take time, BHP is committed to seeing it through.

Kloppers has gone on to China to meet with customers there after visiting orebuyers in Japan and South Korea on Monday and Tuesday.

Source : The Jakarta Post, Page : 16 

 

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