News that the European Commission will launch an investigation into the proposed BHP Billiton-Rio Tinto iron ore joint venture has come as no real surprise, with both companies saying they are fully prepared to assist with any analysis.
“We will work with the European Commission and aim to convince them of the benefits of the joint venture structure,” BHP spokeswoman Samantha Evans told MINING DAILY.
Word from Rio Tinto regarding the investigation was much the same.
“Rio Tinto is cooperating with the European Commission,” a spokesperson told MINING DAILY.
The regulator announced yesterday that it will investigate potential competition issues raised by the $116 billion Pilbara merger, which BHP and Rio say will save them up to $10 billion in synergies.
According to the two companies, after the October amendment that will exclude marketing operations from the joint venture they will remain competitive in the market.
“This is a production joint venture only,” Evans said.
“There will continue to be complete independence in the marketing and commercial strategies, as is the case today.
“Pricing will continue to be decided by the market as a whole and each company will take its own approach to pricing and marketing arrangements just as they do now.”
News of the planned investigation may alter the original timeline of the tie-up, which saw both BHP and Rio hoping to have a solid deal in place by the second half of the year.
The European Commission has said that it will not rush its decision in order to accommodate the companies’ desired timeframe.