Rio, BHP to meet EU watchdog over joint venture:sources

By Foo Yun Chee

BRUSSELS (BestGrowthStock) – BHP Billiton and Rio Tinto will meet EU antitrust regulators by the end of this month to help the European Commission decide whether to clear their proposed joint venture, sources said on Tuesday.

The Commission is examining the miners’ planned $116 billion iron ore production joint venture in western Australia to determine whether it is anti-competitive.

Rio Tinto, the world’s second-largest iron ore producer, and BHP, the third-largest, have said that retaining separate marketing operations under the joint venture should ease regulatory concerns. Steelmakers oppose the deal.

The European Union watchdog is finalizing a technical analysis of the plan before the meeting, said one source close to the case.

“Depending on the outcome of the meeting the Commission will consider whether to issue a statement of objections,” said the source.

The companies could propose concessions during the meeting. A second source familiar with the situation said the miners had not yet offered possible remedies.

The EU’s executive body said it expected to announce soon the result of its investigation.

“The Commission will communicate shortly to the parties the outcome of its preliminary investigation,” a spokeswoman said.

While regulators in Australia, Japan, Germany and other markets are reviewing the deal too, analysts see the Commission as the biggest hurdle due to opposition from EU steel producers.

In a confidential questionnaire sent to third parties this year and seen by Reuters, the Commission said it wanted to know if the joint venture would affect the two miners’ incentives to invest in expansion projects outside western Australia.

The questionnaire also sought market views of the impact on spot market prices and whether the joint venture would lead to co-ordination between the pair and Brazilian peer Vale.

Eurofer, the European steelmakers’ lobbying group whose members include ArcelorMittal, the world’s largest steel company, and Germany’s ThyssenKrupp, has criticized the joint venture, arguing it would curb competition in the seaborne iron ore market.

(Editing by Rex Merrifield and Elaine Hardcastle)

Rio, BHP to meet EU watchdog over joint venture:sources