Wednesday, February 6th, 2008
The Board of BHP Billiton today announced an offer for all of the shares in Rio Tinto Limited and Rio Tinto plc. The combination of BHP Billiton and Rio Tinto will create the world’s premier diversified natural resources company with a unique opportunity to unlock value for shareholders:
— Unparalleled exposure to the same key mineral basins will create significant value by optimising production efficiencies and delivering greater volumes on an accelerated basis to meet growing demand;
— Creation of substantial value through quantified synergies and benefits which are expected to contribute a total incremental EBITDA of US$3.7 billion nominal per annum within seven years of completion of the Acquisition;
— Efficient development of the next generation of large-scale projects in new regions for the benefit of its customers, the communities in which it operates, and its shareholders; and
— A world-class management and operational team with strength and depth across all levels of the organisation with a commitment to the pursuit of excellence and the highest standards in safety and sustainability and a focus on global best practice in community and the environment.
This value will only be unlocked if the Offers are successful.
BHP Billiton’s offer will deliver to Rio Tinto shareholders:
— 3.4 BHP Billiton shares for each Rio Tinto share;
— Approximately 44 per cent of the Enlarged Group compared with approximately 36 per cent based on the market capitalisations of the companies prior to the approach by BHP Billiton to Rio Tinto on 1 November 2007; and
— A 45 per cent premium to the Rio Tinto share price prior to the approach.
The Offers contain a minimum acceptance condition requiring acceptances relating to more than 50 per cent of the publicly-held shares in each of Rio Tinto Limited and Rio Tinto plc. BHP Billiton also proposes a buy-back of up to US$30 billion within one year of completing the Acquisition if its 3.4 for one offer is successful.
BHP Billiton firmly believes that the combination creates value for existing BHP Billiton shareholders who will own approximately 56 per cent of the Enlarged Group. Further, cash flow and earnings per share will be accretive from the first full fiscal year following completion (after adjusting for the proposed share buyback and excluding depreciation on the write-up of Rio Tinto’s assets).
This release is intended to be a summary only and should be read in conjunction with the full text visit: www.bhpbilliton.com, including Appendices, where more detailed information about the Offers (including definitions) can be found.