Mining merger mania
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BOB MOON: Britain’s main stock market index jumped this morning on speculation of a major takeover bid. The glint in investors’ eyes comes from minerals and metals. One of the world’s biggest mining companies could be in play. From London, Marketplace’s Stephen Beard reports.
STEPHEN BEARD: Rumors are rife that BHP, the world’s biggest mining company, is on the trail of a major rival, Rio Tinto.
BHP is refusing to comment, but analysts say it would not be surprising.
Mining companies have been ransacking the world looking for takeover targets. They’re desperate for extra output to meet the soaring demand for metals from China and India. This week Alcoa bid more than $26 billion for Alcan. Kevin Morrison of the Financial Times:
KEVIN MORRISON: Given the number of mergers that have taken place over the past year 12 months there’s very few targets left for the likes of Rio and BHP that they’re now sort of looking at each other.
Analysts say that since Rio Tinto and BHP do not overlap a great deal in the metals they mine, it might be easier to win regulatory approval for any merger.
In London, this is Stephen Beard for Marketplace.
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