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Rio Tinto and BHP Billiton abandon plans for iron ore joint venture

On 18 October 2010 Rio Tinto and BHP Billiton announced their decision to abandon plans for their iron ore joint venture in Western Australia. This ended a 16 month period of interactions with numerous regulatory agencies around the world - including the European Commission, the Federal Cartel Office in Germany, the ACCC, the Japanese FTC, the Korean FTC as well as the Chinese authorities.

The parties estimated that by combining their iron ore assets in the Pilbara, the joint venture could generate USD10 billion of synergies - including large capital expenditure savings on future infrastructure investments. A key issue in the assessment of the transaction was whether, under the joint venture, the parties had incentives to be less aggressive in building additional supply capacity than if the two systems remained separately controlled.

A CRA team including Cristina Caffarra, Valter Sorana, Uǧur Akgün, Rebecca Fordham, Matt Tavantzis and Jonathan Raggett assisted Rio Tinto throughout the process.

See Rio Tinto press release for further details.

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