views

Rio and BHP seal deal

MINING giants BHP Billiton and Rio Tinto shook hands on their proposed $116bn&nbsp; (&pound;67.8bn) iron ore tie-up over the weekend, putting paid to reports that competition bodies would interfere with the deal.<br /><br />The agreement, which is expected to produce synergies of $10bn, has been a bone of much contention for Chinese customers, who say it raises serious questions on excessive dominance of the iron ore market; Rio and BHP are two of the world&rsquo;s three largest producers of iron ore, the other being Brazil&rsquo;s Vale.<br /><br />But the once bitter rivals &ndash; Rio fought off a hostile takeover bid from BHP in 2008 &ndash; expect the deal to complete in the second half of next year without delays from the European Commission or the Australian Competition and Consumer Commission.<br /><br />In Brussels, the European Commission said: &ldquo;We will ensure that there is full compliance with the EU&rsquo;s anti-trust rules.&rdquo;<br /><br />The long-awaited tie-up was originally outlined in June, but formalised on Saturday in binding agreements signed by both companies just ahead of an agreed deadline.<br /><br />Under the plan, each company will end up with 50 per cent stakes in the combined Western Australian iron ore assets, but will continue to market the ore separately. <br /><br />&ldquo;It is an important milestone towards delivering substantial additional benefits to both sets of shareholders, and to the shareholders of our respective joint venture partners in the resource-rich region of Pilbara,&rdquo; Marius Kloppers, chief executive of BHP Billiton said.