BHP, Rio Tinto: The Deal is Still Dead (BHP, RTP)

Print Email

We’ve already conducted the post-mortem on the failed bid by Australia’s BHP Billiton (NYSE:BHP) for Britain’s Rio Tinto (NYSE:RTP). There are just a couple of details worth noting.

First, there was no chance the deal would have made it past Europeanregulators unless BHP was willing to sell off some of its aluminum andiron ore assets. BHP was willing to do that, but had determined that itwas unlikely to find buyers in today’s tough credit market. Nobody waslikely to pay cash, and shares in some other company were notattractive either.

Second, at its peak, the deal was worth about $147 billion. Today it’svalued at $62 billion. Why buy something that is dropping in valueeveryday? This deal was never[] a winner.

Paul Ausick
November 25, 2008