Shanghai: A top advisor to the Chinese Government has reportedly warned that BHP Billiton's proposed $132bn hostile takeover of Rio Tinto would be harmful to China and unfair to the global economy, writes The Age. Xiaoye Wang, a senior advisor to the Chinese State Council and National People's Congress, has urged European regulators to reject the proposed takeover, saying any merger would affect all Asian economies, which rely heavily on iron ore imports for steel production.
The comments come at a sensitive time for BHP Billiton, which has seen prices among key commodities - including oil - under pressure recently, particularly over concerns of some easing in China's growth. China accounts for more than $14bn, or nearly 20%, of BHP Billiton's annual sales.
"In my opinion this merger (will have) a very bad impact on China", Professor Wang told a conference at Melbourne Law School at the weekend. "The BHP merger should be reviewed by the Chinese anti-monopoly agency. China is the biggest consumer of iron ore products and 40% is from Australia. After the merger there will be two competitors only. I believe this is harmful for competition."
Professor Wang, who helped develop China's new anti-monopoly laws, said China's Ministry of Commerce had already received objections to the merger. However, it has no regulatory jurisdiction over any transaction between BHP Billiton and Rio Tinto. "I hope very much (the) European regulators will reject it," she said.
The Australian Competition and Consumer Commission last week gave permission for BHP Billiton's planned takeover of Rio, but the merger remains conditional on clearance from the European Commission, Canada and South Africa.
Analysts believe European regulators could provide the biggest stumbling block for any transactions. Their decision is due by January 15. Following ACCC clearance, speculation is building that Rio is closer to sitting down with BHP to secure an agreed merger on improved terms. [06/10/08]
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
