Tuesday, October 5, 2010

Rio (NYSE:RTP) Abandoning $120 Billion Deal with BHP (NYSE:BHP), Says The Age

Australian media outlet The Age, reported today that the board of Rio Tinto (NYSE:RTP) is poised to abandon its pursuit of a $120 billion iron-ore joint venture with fellow mining giant BHP Billiton (NYSE:BHP). The Age didn't cite the sources of their information.

Reportedly the board of directors of Rio felt the deal may be more favorable to BHP than it was to them. That also could have been somewhat of a forced conclusion because of pressure from some of the shareholders of Rio concerning the deal.

The overall purpose of the deal was to be to streamline costs, which were estimated to save the companies about $10 billion.

That would have come from the combining of operations in the Pilbara region of Australia.

The deal is being examined by regulators to attain approval at this time.

No comments have come yet from either company in reference to the assertions, but that shouldn't take long to confirm and deny.

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