Mr Marius Kloppers CEO of BHP Billiton reiterated his view on Thursday that its proposal to take over Rio Tinto would bring benefits for both sets of shareholders.
Mr Kloppers told the Melbourne Mining Club that 'If our takeover of Rio Tinto is successful, and I believe it will be, the combination will create even greater value for shareholders.”
Mr Kloppers again emphasized what he views as BHP's superior growth profile to that of Rio Tinto, arguing that BHP's growth would come from some of its highest margin businesses and projects with lower risk because they involved expansions of existing mines. He said 'Much of our growth is focused on the highest margin businesses in which we have a clear advantage.”
After the formal address, he basically rejected suggestions that BHP was angling for quick antitrust approval by offering up pre emptive asset sale remedies in the first, one-month phase of the European review, saying BHP's proposition from the outset has been that a BHP-Rio merger will actually help consumers by bringing commodities to the market more quickly and in higher volumes.
Asked about the specific rumor that BHP had offered to spin off Rio's Robe River iron ore business in the Pilbara to get the deal cleared quickly, he said his previous comments stood, adding that BHP had every expectation that after a month the European Commission would initiate the more detailed second phase of its investigation. Stage two examinations usually take several months and any asset disposals tend to be offered towards the end.
BHP Billiton's hostile 3.4 for 1 paper offer, valuing Rio Tinto at about USD 170 billion, is now before the European Commission, the European Union's antitrust regulator, as part of the regulatory process it needs to go through. The commission has until July 4th 2008 to decide on the offer or begin a five month period of considering the offer in more detail. BHP also has to clear regulatory hurdles in Australia, South Africa and the US before it can put its proposal to Rio Tinto shareholders.
