Timeline: Rio and BHP call off $116 billion iron ore JV

SYDNEY (BestGrowthStock) – BHP Billiton (BHP.AX: )(BLT.L: ) and Rio Tinto (RIO.AX: )(RIO.L: ) have scrapped their proposed $116 billion iron-ore joint venture, caving in to opposition from regulators, steelmakers and major investors 16 months after unveiling the plan.

Rio and BHP, the world’s second- and third-largest iron ore miners, had touted the deal to put together their iron ore operations in Western Australian as essential as it would reap $10 billion in savings.

The joint venture would have surpassed Brazil’s Vale (VALE5.SA: ) in size, producing 385 million metric tons of ore initially.

Following is a TIMELINE on the proposed joint venture.

2009

June 5 – Rio says to raise $21 billion through a rights issue and announces joint venture with BHP.

June 9 – Japanese, Chinese and European steelmakers join forces to fight the Rio-BHP plan, while China calls for “a fully open international market.”

Eurofer says the jv poses competition issues, urges EU antitrust bodies to investigate.

June 12 – Australia’s government gives cautious support for the jv, as a newspaper reports China had threatened sanctions against the two if the deal went ahead.

June 17 – A senior Chinese official from the Ministry of Industry and Information Technology (MIIT) says proposed jv has “a strong monopolistic flavor,” and Chinese firms are actively seeking ways to cope with it.

Oct 15 – Rio and BHP say they have scrapped plans to co-market iron ore from the proposed jv.

Oct 22 – BHP chairman says jv is on track.

Nov 9 – Rio and BHP have not received any indications the Europe will block the deal, says the head of Rio’s iron ore division.

Nov 26 – BHP dismisses talk that Rio is balking at the proposed $116 billion jv, says they are close to a binding agreement, which is due to be signed by December 5.

2010

June 21 – The Western Australia government approves requests by Rio and BHP to share port and rail lines and blend iron ore in return for higher royalty payments

Oct 6 – The Sydney Morning Herald quotes Rio Chairman Jan du Plessis addressing a board meeting in terms that indicate the joint venture was all but dead and buried. Rio statement acknowledges “communications from regulators that indicate potential obstacles to achieving clearance.”

Oct 14 – The German Federal Cartel Office issues a statement saying it would prohibit the merger of the Western Australian. European Union regulators, deemed the biggest hurdle to the alliance, are set to say the merger could hurt competition, a source familiar with the case said.

Oct 18 – BHP and Rio call off joint venture without triggering a $250 million break fee.

Source: Reuters

(Compiled by Narayanan Somasundaram; Editing by Ed Davies)

Timeline: Rio and BHP call off $116 billion iron ore JV