Green light for BHP

BHP BillitonÔÇÖs bid for rival mining group Rio Tinto emerged from the shadows today as the Australian Competition and Consumer Commission said it would not oppose the bid on competition grounds.┬á "The proposed acquisition would not be likely to substantially lessen competition in any relevant market," said ACCC chairman Graeme Samuel in a statement. ┬á┬á "This conclusion was reached after conducting a comprehensive review of the proposed acquisition, including extensive market inquiries with a range of interested parties and careful consideration of the internal documents of the merger parties." ┬á┬á When the ACCC published its preliminary views in August it asked BHP for more information, as it had concerns that the combined entity would be able to influence the price of iron ore and its global supply.┬á ┬á┬á Although steel makers in Asia and Europe oppose the merger, because a combination of BHP and Rio would control more than a third of global iron ore supplies, the ACCC said there were sufficient alternative suppliers for this not to be a problem. ┬á┬á It admitted that the large upfront costs made it difficult for new companies to enter the ore-mining industry, but noted there had been "significant" expansion of competitors in response to high ore prices in recent times.┬á┬á BHP made an informal approach to Rio Tinto last November, when it offered a three-for-one share proposal worth $139 billion, but that approach was rejected out of hand.┬á┬á In February 2008 BHP tabled a formal $147 billion takeover bid for its rival, on the eve of a deadline set by the UK Takeovers Panel. ┬á┬á If BHP succeeds in the acquisition of Rio, it would be the largest merger in the history of the mining industry, and the worldÔÇÖs second-biggest takeover deal after VodafoneÔÇÖs purchase of German telco Mannesmann in 2000.┬á┬á The European Union is expected to report on its enquiry by 15 January. ┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á