AUSTRALIA — Heightened risk within the mining industry has BHP Billiton dropping its takeover bid for Rio Tinto. Billiton has reportedly spent US$450 million toward the merger.
BHP Billiton issued a news release saying the takeover is no longer an attractive proposition. Six months ago the deal was estimated to be worth US$194 billion, but it is now valued in the $60-billion neighbourhood. BHP Billiton also said it was not willing to undertake the prospective level of debt in today's financial climate and had concerns regarding its ability to divest certain non-core assets. (www.BHPBilliton.com)
Rio Tinto acknowledged the withdrawal in a news release saying it will continue "its strategy of operating and developing large-scale, long-life, low-cost assets to generate significant value for shareholders." (www.RioTinto.com)
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