BHP and RIO, $37 billion annual savings, what do you think? - Aussie Stock Forums

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  1. #1

    Default BHP and RIO, $37 billion annual savings, what do you think?

    BHP has just come out and said that by combining annually with Rio it will have $37 billion in synergies - this is the first article I can find anywhere on all the regular sites I watch - on this topic: http://www.businessspectator.com.au/...J?OpenDocument

    What do you think? Good Deal / Bad deal? Good thing to do if they can save $37 billion annually?

  2. #2

    Default Re: BHP and Rio, $37 billion annual savings, what do you think?

    The BHP release to the ASX states:

    In the seventh full year following completion this, therefore, gives a total incremental EBITDA of US$3.7 billion nominal per annum of quantified synergies.

  3. #3

    Default Re: BHP and Rio, $37 billion annual savings, what do you think?

    Maybe this is not the correct thread to place this but I couldnt find a better one. So, I found this article (see below in red) on the BHP RIO takeover.

    Does anyone believe this bull? Do these Chinese guys really expect shareholders and other stakeholders (apart from themselves) to believe this? If they do then all I can say is either they came down with the last shower of rain, or they believe the rest of us came down with the last shower of rain.

    You know it's quite funny, their logic. On one hand the Chinese are saying that a BHP takeover of RIO would create uncompetitive conditions in "the market", and yet if the reverse were to happen, ie RIO takeover BHP, with Chinese backing, then that is OK. Huh?

    And why is it a "....tricky problem for a (sic Australian) government......"?
    It's not actually. A takeover or significant holding by any foreign sovereign fund is CLEARLY not in the national interest, let alone the existing shareholders. (I classify Chinalco as a sovereign fund - all Chinese companies of this size are controlled by the Politiburo). Game, set and match for the FIRB and Australian Government. Tell Chinalco to bugger off. It is time for the FIRB and all governments to look very seriously at the actions of sovereign funds. And I am not being xenophobic here! The concept of sovereign funds controlling market sectors is not the way a "free market" is supposed to run. They would clearly have their national interests competing directly against market forces. This would distort the whole basis for the capitalist free market environment. And remember the Chinese only support a capitalist free market when it suits their Politiburo's self interest. For example, Copyright in Chinese translates to "right to copy".

    OK, if you dont want a capitalist free market system (and there are many who do not) then lets have that debate but lets not have this wishy washy backdoor subterfuge moves that will disrupt the market.

    I dont believe you Mr Xiao. Nic off. You cannot be both a communist and a capitalist at the same time.

    Oh, by the way.... Alcoa also are part of this deal. You dont think they are going to pass up a tidy profit on RIO if the opportunity arises?

    Disclosure: I hold BHPB.

    CANBERRA, Feb 5 (Reuters) - Aluminum Corp of China
    (Chinalco) will explain to Australian political leaders on
    Tuesday why it bought a 9 percent stake in Rio Tinto Ltd/Plc
    <RIO.AX> <RIO.L>, in a move seen as an attempt to ease concerns
    may try to take over one of Australia's biggest companies.

    Chinalco President Xiao Yaqing will meet senior ministers in
    Canberra, a day after saying that the $14 billion purchase in
    partnership with Alcoa Inc <AA.N> was aimed at diversifying
    Chinalco's business beyond aluminium.

    The stake purchase spurred speculation Chinalco may bid for
    Rio, which has spent the last three months fighting a takeover
    proposal from BHP Billiton Ltd/Plc <BHP.AX> <BLT.L> pitched at
    $139 billion.

    A takeover move by Chinalco would require the approval of
    the Australian government's Foreign Investment Review Board

    That could pose a tricky problem for a government, which
    would be caught between a commitment to good relations with
    China, a major trading partner, and the loss of an iconic local
    company to a foreign, state-owned entity.

    Chinese Foreign Minister Yang Jiechi also was expected to
    touch on the sale during meetings on Tuesday with Australia's
    prime minister, Kevin Rudd, and the foreign minister, Stephen
    Smith, also at Canberra's Parliament House.

    Australian Treasurer Wayne, who would have to act on any
    FIRB advice, said on Monday that if he was required to make a
    decision, it would be made on "national interest
    Australia in 2001 blocked an attempted takeover of Woodside
    Petroleum Ltd <WPL.AX> by Anglo-Dutch oil firm Royal Dutch/Shell
    <RDSa.L> on similar grounds.

    Xiao told reporters in Sydney on Monday there were no
    immediate plans to buy more Rio stock.

    Chinalco's 12 percent stake in Rio's London listing, giving
    it a holding of just over 9 percent in Rio's dual-listed entity,
    does not automatically require a FIRB review.

    BHP has until Wednesday to declare a formal bid for Rio or
    refrain from pursuing a takeover for at least six months under a
    "put up or shut up' regulation imposed by Britain's Takeover

    Xiao on Monday insisted the deal was more about extending
    state-controlled Chinalco's reach into diversified markets, such
    as iron ore and copper, where Rio is strong.

    Chinalco lodged notification documents with FIRB last week
    and will this week hand over supplementary documents, after
    which FIRB officials can ask for responses from BHP, Rio and

    (Reporting by Rob Taylor and James Regan, editing by Jonathan

    ((rob.taylor@reuters.com; Reuters Messaging:
    rob.taylor.reuters.com@reuters.net, +612 6273 3700))

    (c) Reuters Limited 2008

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