Australian giant mining company BHP Billiton has announced that its board of directors no longer believes that the completion of the offers for rival mining company Rio Tinto would be in the best interests of BHP Billiton shareholders.
The decision was attributed to worsening market conditions and demands for asset sales from European regulators. Accordingly, BHP Billiton intends to write off the costs of approximately $450 million incurred in progressing this matter over the eighteen months up to this announcement in the December 2008 half year results.
Based on Monday's closing share prices, BHP Billiton's offer was worth US$66 billion.
Commenting on the decision, BHP Billiton chairman Don Argus stated, "We have said that we would only seek to complete the transaction if it was in the best interests of BHP Billiton's shareholders. While we have not changed our view of the basic industrial logic of the combination, or of the longer-term prospects for natural resource demand growth driven by emerging economies, we have concerns about the continued deterioration of near-term global economic conditions, the lack of any certainty as to the time it will take for conditions to improve, and the risks that these issues imply for shareholder value."
The takeover bid had already passed Australian and US competition regulators and was subject to a ruling from the European Union's antitrust regulator expected early next year.