EC to probe BHP-Rio tie-up

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Date: Friday 04 Jul 2008

LONDON (ShareCast) - The European Commission (EC) is to investigate BHP Billiton’s $163bn offer for its fellow mining giant Rio Tinto, saying such as take-over may be incompatible with the single market.

A decision will be unveiled on November 11, the EC said.

The US government yesterday gave partial anti-trust clearance to BHP to go ahead with its bid for Rio Tinto.

The US Department of Justice and the Federal Trade Commission granted early termination of the Hart-Scott-Rodino (HSR) waiting period for BHP Billiton's proposed acquisition of Rio Tinto. Termination of the HSR waiting period satisfies part of the US merger control's pre-condition for BHP's proposed offer for Rio Tinto.

BHP’s proposed takeover of Rio is opposed by steelmakers in Europe and China, who fear it would give BHP the ability to inflate iron ore prices.

A BHP-Rio tie-up would result in control of over a third of global iron ore output.

BHP announced earlier today that has reached an agreement with China's Baosteel on the price for iron ore deliveries for the contract year starting 1 April 2008.

The miner said Baosteel will pay 144.66 cents per dry metric tonne for fine ore and 201.69 cents per dry metric tonne for lump ore.

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