Mining giant withdraws offer for Rio Tinto

The Australian-headquartered company blamed the economic downturn and plunging commodity prices for its decision.

It added that it had concerns about the ability to sell Rio Tinto assets, including Alcan, and the combined level of debt of the combined company.

Marius Kloppers, BHP Billiton’s chief executive, said: “We have previously said that similar cultures and the overlap of key assets and infrastructure make this a compelling combination.

“Recent global events and associated falls in commodity process have, however, altered risk dimensions.”

Nicholas Mockett, packaging specialist at Europa Partners, told Packaging News that it makes sense for BHP to walk away from the deal.

“It’s no surprise that the offer has been shelved in this falling and uncertain market,” he said.

“Also, banks are more reluctant to lendmoney than they were five or six months ago.”

Earlier this month, the European competition regulators issued a formal complaint about the takeover of Rio Tinto over concerns that the takeover would result in higher prices and reduced choice for customers.

Meanwhile, Australian regulators and the US Justice Department approved the deal, with some reservations, but did not demand any asset sales.

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