Chapter 724 Investing in Rio Tinto
In the second half of 2008, with the outbreak of the subprime mortgage crisis, Rio Tinto, one of Australia’s iron ore giants, also experienced a debt crisis and was in urgent need of seeking external support. Financial assistance.
At that time, BHP Billiton, another iron ore giant in Australia, took the opportunity to offer to acquire Rio Tinto for US$100 billion.
BHP Billiton was formed by the merger of two giant mining companies. BHP was founded in 1885 and is headquartered in Melbourne. It is one of the oldest and largest companies in Australia.
Billiton is a British mining company and a pioneer in the international mining industry. It was once known for its continuous innovation and intensive operation methods.
In 2001, the two companies merged to form BHP Billiton Mining Group, which together with Rio Tinto and Brazil's Vale is listed as the world's three largest iron ore giants.
Although the overlap rate among the shareholders of BHP Billiton and Rio Tinto was as high as 70% at that time, Rio Tinto still believed that BHP Billiton's acquisition price of US$101 billion was too low and was unwilling to accept this acquisition.
But the global economic situation was not good at that time, and Rio Tinto was facing a debt crisis. Without the injection of external funds, it might have been fatal for them.
At this time, Chinalco from China entered the game.
At that time, Chinalco first obtained 12% of Rio Tinto’s shares at a price of US$14 billion. Then they reached an investment agreement with Rio Tinto totaling US$19.5 billion, preparing to transfer its shares in Rio Tinto. The shareholding will be expanded to nearly 20%, so that Chinalco will become Rio Tinto's largest shareholder and complete the acquisition of Rio Tinto.
However, because Chinalco's previous funds relieved Rio Tinto's debt crisis, and then under BHP Billiton's vigorous lobbying, there was a discussion in Australia that China Corporation's control of Rio Tinto, an iron ore giant, would harm the interests of its ore resources. ……
The most critical thing is that at that time, Chinese companies had just begun to go abroad for mergers and acquisitions, and they were too trusting in the "business reputation" of the West. The US$19.5 billion investment agreement between Chinalco and Rio Tinto stipulated liquidated damages of only 1%. That’s $195 million.
In the first half of this year, because Chinalco’s funds previously solved Rio Tinto’s urgent needs, and the prices of raw materials such as iron ore rose sharply, Rio Tinto’s stock price also rose by 70%!
Therefore, Rio Tinto paid US$195 million in liquidated damages to Chinalco without hesitation, and chose to terminate the agreement they reached...
After that, BHP Billiton once again negotiated with Rio Tinto on the agreement between the two parties. Iron ore business merger negotiated.
At this time, the West African Mining Company appeared. Although BHP Billiton, Rio Tinto and Vale are the world's three iron ore giants, the iron ore resources owned by the West African Mining Company at this time are relatively considerable.
And Rio Tinto is not willing to hand over the dominance of its iron ore business to BHP Billiton - after all, in terms of scale, BHP Billiton will definitely occupy more shares in the joint venture between the two parties.
Therefore, after negotiating with West African Mining Company, an agreement was finalized for West African Mining Company to inject US$20 billion into Rio Tinto and hold 12% of its shares.
After this agreement is reached, Chinalco's shareholding ratio in Rio Tinto will be diluted to 10.56%, making West African Mining Company the largest shareholder of Rio Tinto.
However, so far, West African mining companies can only say that they have a certain say in Rio Tinto. After all, U.S. capital still accounts for a larger proportion of Rio Tinto's shareholder composition at this time.
Compared with Chinalco’s Chinese background, West Africa Mining Group’s investment in Rio Tinto is relatively easy for Australia to accept.
After all, a considerable portion of the staff of the West African Mining Company comes from the Australian mining company OZ Mining they previously acquired, and Kolo, where the West African Mining Company is located, is a Commonwealth country like Australia.
Behind the West African Mining Company, there is also the presence of the British Duke Barron, so BHP Billiton will definitely not be able to destroy it like it did with Chinalco... This time, the West African Mining Company’s investment in Rio Tinto, The United Bank for Africa will be responsible for financing part of the funds. According to the current revenue situation of West African mining, this part of the financing will not be under too much pressure and can be paid off soon.
The key is that Rio Tinto’s market value will continue to rise in the future, and there are not many opportunities to invest in their shares. If you have the opportunity, you will definitely It’s something that needs to be caught.
Of course, the current negotiations between West African Mining Company and Rio Tinto have reached the final stage.
As Barron's partner, Count Bute still knows a lot about the inside information of the West African Mining Company.
When this cooperation was announced, he couldn't help but be surprised.
Although their family's Stuart Mining Group has once been glorious, in terms of scale, it is far from being able to compare with giants like Rio Tinto.
I thought that when I first met Barron, he was just a young man who had just inherited a modest family fortune. However, a few years later, the industry he controlled had become so terrifying that even West African Mining Company, an industry that is not considered a core industry, has become the largest shareholder of Rio Tinto.
This made Earl Bute feel very complicated in his heart.
......
Although they all came to Australia, Barron did not immediately arrange for Tamaran and Catherine to live in Australia with Bonnie and the Countess of Bute. Grace Lavender Manor on Tamania Island, but purchased a new manor in Melbourne for them to live here first.
Even if Barron has the idea of letting these women "live in harmony", this process must always be done step by step...
Otherwise, they may become Shura in minutes. field.
Speaking of which, Tamaran's social circle has little to do with Bonnie and Mrs. Bute. However, Katherine Neville, as a member of the upper-class ladies' circle in London, often appears in some social situations. , I have met Bonnie a few times, and I am relatively familiar with Countess Bute.
So I believe it shouldn’t be too difficult for them to accept it.
But at present, it seems that the relationship between the two women, Tamaran and Catherine Neville, is not bad, and they are a bit like best friends.
There is also a reason why Catherine took the initiative to express her kindness. After all, she didn’t have much idea of competing with the women around Barron. Now she is following Barron after Colin Hall’s death. , I have children, I am not short of money, and I feel a little bit want-free.
Well, the only thing may be the obsession with Barron in some aspect...
This is also the reason why Barron specially brought Catherine and her daughter this time. On the one hand, he hopes that they can gradually become familiar with and adapt to it.
In addition, given Catherine's identity and character, she and the Countess of Bute are also suitable to serve as lubricants between these women.
(End of this chapter)