BHP BILLITON has made its formal offer to takeover RIO TINTO on Feb. 5, 2008. BHP Billiton is offering 3.4 of its shares for each share of Rio Tinto, a value that is said to represent a 45% premium on the Rio Tinto share price.
BHP Billiton insists that a combined company will create "quantified synergies and benefits" worth US$3.7 billion per year within the first seven years of the merger. It also expects efficient development of large-scale projects to the benefit of customers, communities and shareholders. BHP Billiton further promises to maintain a world-class management and operating team committed to the highest safety and sustainability standards.
BHP Billiton's offer is dependent on requiring at least 50% of the publically held Rio Tinto shares.
Rio Tinto executives have rejected the offer as "not being in the best interests" of Rio Tinto shareholders.