皇冠体育app

Economy

Markets

Industries

Insights

Reports

Events

皇冠体育applco's roadblocks decreasing

By Jiang Wei (皇冠体育app Daily)
Updated: 2009-04-03 07:56

Aluminum Corp of 皇冠体育app (皇冠体育applco) has won approval from the German government for its proposed investment in global mining giant Rio Tinto Group, clearing the second hurdle for the deal.

Related readings:  Rio Tinto chief backs stake buy  Rio Tinto may sell more assets if 皇冠体育applco deal fails  皇冠体育applco deal gets initial nod  Australia competition body won't block Rio-皇冠体育applco

The German Federal Cartel Office had found no anti-competitive element to the proposed investment by 皇冠体育applco, said the London-based Rio Tinto, which has significant business in Germany. It is the second nod from relevant regulators after the approval from the Australian Competition and Consumer Commission.

The proposed $19.5-billion investment has still to be approved by Rio Tinto's shareholders and regulators in 皇冠体育app, the US as well as Australia, where 皇冠体育applco and Rio Tinto have substantial operations.

皇冠体育applco offered to invest $12.3 billion in Rio Tinto's aluminum, copper and iron ore mines and spend another $7.2 billion on convertible bonds in the company. If all approvals come through, the investment will double 皇冠体育applco's existing 9.3 percent stake in Rio Tinto Group to 18 percent.

皇冠体育applco declined to comment on the process yesterday but President Xiong Weiping told an earlier press conference in Hong Kong he was confident of the company's investment in Rio Tinto getting clearance from Australia's Foreign Investment Review Board, the key approver of the deal.

"I've been in office more than a month and as far as I know 皇冠体育applco does not have a plan B (in a reference to Rio Tinto's alternative plan). But of course, we have a draft plan for the best and worst case scenarios," he said.

The Review Board and Australia's Treasurer Wayne Swan are expected to announce by June whether they approve the deal.

The proposal is backed by Rio Tinto's board, which expects to reduce the company's $40 billion in debt, and has won support from some major shareholders.

The Sydney Morning Herald yesterday quoted Aberdeen Asset Management's global head of equities, Hugh Young, as saying that the deal was "clever" for Rio Tinto. Aberdeen is a major shareholder of Rio Tinto.

"We actually got a good deal and 皇冠体育applco does not threaten national security or anything like that," Young told reporters during a visit to Australia. "So, I think it is good for Australia and should be welcomed."