Uncertainties remain over how the Chinese may respond to Rio’s cash call, Lex noted on Friday. And there’s still the little matter of competition approval. But some sort of Rio/BHP tie-up was always the logical path to take.
It is premature to describe the package as a win:win. If Chinalco decides not to take up its 9 per cent entitlement, Rio has a nasty overhang. Competition regulators may also find fault in the JV structure. But provided both companies can bury years of animosity, and Rio can repair relations with its most important customer nation, that is what it may become. Meantime, credit Rio chairman Jan du Plessis deserves with an elegant salvage job.
Full lex note on Rio/BHP available here.
Related links:
Rio Tinto to raise $15.2bn in share sale – FT