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 broke out in a debt crisis and urgently needed external financial assistance.

At that time, BHP Billiton, another iron ore giant in Australia, took the opportunity to propose to acquire Rio Tinto at a price of 100 billion US dollars.

BHP Billiton was formed by the merger of two giant mining companies. Among them, 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 famous for its continuous innovation and intensive operation methods.

In 2001, the two companies merged to form BHP Billiton Mining Group, which was listed as the world's three largest iron ore giants together with Rio Tinto and Vale of Brazil.

Although the overlap rate between BHP Billiton and Rio Tinto's shareholders 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. If there was no injection of external funds, it would be fatal to them.

At this time, Chinalco from China entered the game.

At that time, Chinalco first acquired 12% of Rio Tinto's shares at a price of US$14 billion. Then they reached an investment agreement with Rio Tinto for a total of US$19.5 billion, preparing to expand its holdings in Rio Tinto to nearly 20%. In this way, Chinalco will become Rio Tinto's largest shareholder and complete the acquisition of Rio Tinto.

But because Chinalco's previous funds resolved Rio Tinto's debt crisis, and then under BHP Billiton's strong lobbying, Australia had a discussion that China's holding of Rio Tinto, an iron ore giant, would damage its ore resource interests...

The most important thing is that because Chinese companies had just begun to go abroad for mergers and acquisitions at that time, they trusted the "business reputation" of the West too much. The penalty stipulated in the US$19.5 billion investment agreement between Chinalco and Rio Tinto was only 1%, that is, US$195 million.

In the first half of this year, because the funds from Chalco had solved Rio Tinto's urgent needs, and the prices of raw materials such as iron ore had risen sharply, Rio Tinto's stock price had once risen by 70%!

Therefore, Rio Tinto paid a penalty of US$195 million to Chalco without hesitation and chose to terminate the agreement they had reached...

After that, BHP Billiton negotiated with Rio Tinto again on the merger of the iron ore business between the two parties.

At this time, 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 West African Mining Company at this time are also quite considerable.

Moreover, Rio Tinto was not willing to hand over the dominance of its iron ore business to BHP Billiton - after all, in terms of scale, BHP Billiton must have more shares in the joint venture between the two parties.

Therefore, after negotiations with West African Mining Company, it was finally determined that West African Mining Company would inject US$20 billion into Rio Tinto and hold 12% of its shares.

After this agreement is reached, Chalco's shareholding in Rio Tinto will be diluted to 10.56%, and West Africa Mining Company will become Rio Tinto's largest shareholder.

However, West Africa Mining Company can only say that it has a certain voice in Rio Tinto. After all, American capital still accounts for a larger proportion of Rio Tinto's shareholders at this time.

Compared with Chalco's Chinese background, West Africa Mining Group's investment in Rio Tinto is easier to be accepted by Australia.

After all, a considerable number of West Africa Mining Company's personnel composition comes from the Australian mining company OZ Mining that they acquired before, and Colo, where West Africa Mining Company is located, is also a Commonwealth country like Australia.

Behind West Africa Mining Company, there is also the existence of Barron, the Duke of England, so BHP Billiton will definitely not be able to destroy it like it did to Chalco...

This time, West Africa Mining Company's investment in Rio Tinto will be financed by the United Bank of Africa. According to the current revenue of West Africa Mining, this part of the financing is not too much pressure and can be repaid soon.

The key is that Rio Tinto's market value will continue to rise in the future, and there will not be too many opportunities to invest in their shares, so you must seize the opportunity.

Of course, the current negotiations between West African Mining Company and Rio Tinto have reached the final stage.

As Barron's partner, Earl Butt still knows a lot about the inside story of West African Mining Company.

After this cooperation was announced, he was also surprised.

Although their family's Stuart Mining Group was once glorious, it is now far from being comparable to a giant like Rio Tinto in terms of scale.

When I first met Barron, he was just a young man who inherited a small family business, and a few years later, the industry he controlled was so terrifying that even West African Mining Company, which was not a core industry, had become Rio Tinto's largest shareholder.

This made Earl Butt feel very complicated.

…

Although they all came to Australia, Barron did not immediately arrange for Tamaran and Catherine to live with Bonnie and Countess Bute in Grace Lavender Manor on Stamania Island. Instead, he bought a new manor in Melbourne and let them live there first.

Even if Barron wanted these women to "live in harmony", the process must always be gradual...

Otherwise, it might become a Shura field in a minute.

Speaking of which, Tamaran's social circle has no intersection with Bonnie and Mrs. Bute, but Catherine Neville, as a member of the upper-class ladies' circle in London, has met Bonnie several times in some social occasions, and is also familiar with Countess Bute.

Therefore, I believe it should not be too difficult for them to accept it.

However, it seems that the relationship between 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 show her goodwill. After all, she herself does not have too many ideas to compete with the women around Barron. Now that Colin Hall died, she is with Barron, has a child, and is not short of money, she feels a little bit free.

Well, the only thing may be her obsession with Barron in a certain aspect...

This is also the reason why Barron deliberately brought Catherine and her daughter this time. On the one hand, he hopes that they can gradually get familiar and adapt.

In addition, with Catherine's identity and personality, she and Countess of Bute are also suitable as lubricants between these women.