BHP, RIO SHOULD SELL COEGA - Allan Seccombe

Mon, 27 Oct 2008

South Africa's Competition Commission has recommended that the Competition Tribunal approve BHP BILLITON'S $70bn takeover bid for rival RIO TINTO, provided that it sells RIO TINTO'S Coega aluminium smelter project within 12 months of a merger. The Competition Tribunal is South Africa's final decision-maker on competition issues. European Union regulators are reported by Bloomberg to have told BHP BILLITON that its proposed offer may breach competition laws. The news agency cited two unnamed sources as saying the EU regulators will issue a statement of objection to the hostile bid, which will create a merged company with a large share of the global iron ore market with price implications for that commodity. BHP BILLITON made an initial three-for-one share offer for RIO TINTO in November 2007, subsequently sweetening the offer to 3.4 shares per Rio share. Rio has rejected the offer.