Monday, October 18,
BHP Billiton and Rio Tinto have scrapped their proposed $116 billion Iron-ore joint venture as expected, caving in to opposition from regulators, steelmakers and major investors 16 months after unveiling the plan.
The collapse of the deal marks top global miner BHP’s second failed attempt to grab a piece of Rio Tinto’s superior Iron ore assets in three years.
The failure of the joint venture will be slightly more positive for Rio than BHP, but it’s important to remember it’s actually a negative for both companies,” said Ben Lyons, an analyst at ATI Asset Management.
The two companies could pursue moves to share infrastructure and blend iron ore in Western Australia, under a recent agreement with the state government, which would have yielded at least half of the savings prized in the joint venture plan.
The decision to call off the deal has been widely expected after European regulators indicated they would block the deal.
Source: Reuters
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