 Australia’s competition watchdog warned on Friday that a merged BHP Billiton and Rio Tinto might be able to, and want to, influence global iron-ore supply and prices.
This could lead to steelmakers paying “significantly” higher prices for the raw material, the Australian Competition & Consumer Commission (ACCC) said.
BHP Billiton, the world’s biggest resources company, formally launched its all-share takeover bid for rival Rio Tinto in February, which the smaller company snubbed as not reflecting its true value and future prospects.
The ACCC said it would receive submissions regarding the proposed merger until September 5, with the intention to announce its final view on October 1.
So far, BHP Billiton has received US regulatory approval, and has begun the filing process to get clearance with China’s Ministry of Commerce.
The resources multinational had already filed for clearance in the European Union, the US, Canada and South Africa, and would file in Taiwan, Korea and Japan at a later date.
On Monday, BHP Billiton said that its proposed takeover “makes more sense than ever”, and that his company was hard at work trying to make it happen.
“It’s a situation of two plus one equals five,” he said, presenting a record set of results, which were important to the success of the bid.
Rio Tinto CEO Tom Albanese is preparing to present his company’s results for the half-year to June 30 on Tuesday next week, which the market will be watching closely.
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