Australian sector bankers and analysts told dealReporter that Fortescue Metals Group is likely to emerge as the next potential takeover target in any iron ore sector consolidation following a BHP and Rio Tinto tie up and also other iron ore juniors could also get snapped up in any wave of sector consolidation.

According to Mr James Wilson, a resource analyst at DJ Carmichael, with the BHP Rio merger, the number of players in the iron ore sector will reduce significantly. Mr Wilson said that “In such a scenario Fortescue Metals is likely to emerge as the next takeover candidate. Fortescue has about 2.5 billion tonnes of resources and once a company gains control over Fortescue, a potential bidder could gain control over most of the infrastructure facilities at Pilbara.”

Mr Wilson said that any merger provides synergies of cost and other possible takeover candidates could be companies such as Atlas Iron, BC Iron and Red Hill Iron.