After almost a year and a half of pursuing a deal to combine iron ore operations, BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) have finally thrown in the towel, acknowledging it's not going to be approved by regulators.
Although the size of the deal generated a lot of interest, the judgement of both CEOs, Marius Kloppers for BHP and Tom Albanese for Rio Tinto, have been questioned as to why they even went after something with so little chance of success.
For Kloppers it's especially telling, as he is under pressure to expand the company, and he now has two failures under his belt and if facing strong pressure from Canadian forces to undermine the bid for Potash Corp. (NYSE:POT), although he has a legitimate chance at making that one happen.
As far as the Rio, BHP deal, the benefit was touted as savings of a minimum of $10 billion if they combined operations.
The deal for Potash is far more realistic than the past attempt to acquire Rio Tinto be BHP or the proposed iron ore deal. For a company the size of BHP it is big enough to add to the bottom line and grow the company in a new sector, while not being so large it would damage their credit rating and pull the company down for years.
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