Australia's resources giants sign binding agreeme
Australia's resources giants BHP Billiton and Rio Tinto will focus their energies on appeasing competition regulators across several jurisdictions, after signing a binding agreement for an historic 116 billion U.S. dollars iron ore merger at the weekend.
Submissions seeking approval for the proposed joint venture have been filed with the European Commission and Australian Competition and Consumer Commission, with similar documentation expected to be submitted to regulators in China and Japan by the end of the year.
The Monday Australian reports that the miners are aiming for the venture -- which will see the pooling of their iron ore mines, ports and railways in Western Australia's Pilbara region into a single company -- to be operating in the second half of next year.
"We are very pleased to now have formal and binding agreements in place to develop this important joint venture," BHP chief executive Marius Kloppers said on Saturday.
"This deal has effectively been more than a decade in the making. It is an important milestone towards delivering substantial additional benefits to both sets of shareholders, and to the shareholders of our respective joint venture partners in the Pilbara."
Under the deal, BHP has agreed to pay Rio about 5.8 billion U.S. dollars to ensure they both have an even 50 percent of the new company.
Concern about competition was one of the biggest hurdles to BHP's hostile takeover bid for Rio which was announced in 2007 but later abandoned.