The Anglo-Australian mining group BHP Billiton has its bid on Tuesday branchegenoot Rio Tinto repealed. BHP says to waive the bid by the deteriorating market conditions and the turmoil in financial markets.
"The board of BHP has decided that completion of the bid is no longer in the interest of the shareholders of BHP is. We have concerns about the continuing deterioration of global economic conditions and the lack of certainty about how long it will take before the situation improves, "said BHP Chairman-Argus Thursday.
The biggest mining group in the world in February brought a hostile bid in its own shares on the also British-Australian Rio Tinto. The bid was rejected by Rio Tinto because it was too low. The decrease in share price of BHP, the value of the bid down from more than 150 billion dollars earlier this year to around 58 billion dollars (45 billion euros) currently.
Worry about debt
BHP is worried that a takeover of Rio Tinto an accumulated debt would pose too great a risk for the company. BHP also pointed to the sale of parts by the European Commission as a condition for a merger with Rio Tinto has been enforced. The EC would decide early next year on the acquisition. Earlier already gave the Australian and U.S. antitrust authorities the green light.
The acquisition would have led to one of the largest producers of iron ore in the world. Many steel companies had therefore objections to the proposed acquisition because they were afraid that the merged company would gain too much influence on the iron ore market.
Declining commodity prices
Because of the concerns about the weakening world economy, the price of commodities fell sharply this year. Due to the weakening world economy, the demand for raw materials and builders have a lot of my suffering.
The withdrawal of the bid for Rio Tinto is unexpected for many analysts. "There was certainly no indication that BHP would do this, it comes as a surprise," said an analyst in Sydney. On the stock market in London BHP shares rose more than 16 percent. However, Rio Tinto plummet 40 percent.
"The board of BHP has decided that completion of the bid is no longer in the interest of the shareholders of BHP is. We have concerns about the continuing deterioration of global economic conditions and the lack of certainty about how long it will take before the situation improves, "said BHP Chairman-Argus Thursday.
The biggest mining group in the world in February brought a hostile bid in its own shares on the also British-Australian Rio Tinto. The bid was rejected by Rio Tinto because it was too low. The decrease in share price of BHP, the value of the bid down from more than 150 billion dollars earlier this year to around 58 billion dollars (45 billion euros) currently.
Worry about debt
BHP is worried that a takeover of Rio Tinto an accumulated debt would pose too great a risk for the company. BHP also pointed to the sale of parts by the European Commission as a condition for a merger with Rio Tinto has been enforced. The EC would decide early next year on the acquisition. Earlier already gave the Australian and U.S. antitrust authorities the green light.
The acquisition would have led to one of the largest producers of iron ore in the world. Many steel companies had therefore objections to the proposed acquisition because they were afraid that the merged company would gain too much influence on the iron ore market.
Declining commodity prices
Because of the concerns about the weakening world economy, the price of commodities fell sharply this year. Due to the weakening world economy, the demand for raw materials and builders have a lot of my suffering.
The withdrawal of the bid for Rio Tinto is unexpected for many analysts. "There was certainly no indication that BHP would do this, it comes as a surprise," said an analyst in Sydney. On the stock market in London BHP shares rose more than 16 percent. However, Rio Tinto plummet 40 percent.
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