Chinalco and Alcoa team up to buy twelve percent stake in Rio Tinto

Source: Energy Digital

Date :01/02/2008 13:48:42

According to reports, Chinese firm Chinalco and the USA’s Alcoa have bought a stake in Rio Tinto to disrupt its proposed merger with BHP Billiton.

The Chinese aluminium giant has said that the joint deal is China’s largest ever foreign investment, although it has not so far revealed how much of the stake it owns.

Analyst believe that the acquisition is a possible defensive move to prevent or disrupt the prolonged proposed merger between Rio Tinto and BHP Billiton, two of the world’s biggest producers of vital raw materials.

Recently, China has invested $5 billion for a stake of up to 9.9 pct in US investment heavyweight Morgan Stanley and around $3 million for ten percent of US private equity Blackstone through China Investment Corp, the country’s controversial sovereign wealth fund.

Analysts believe that more deals like these are imminent, but whether or not they overtake this latest transaction remains to be seen.

February 1, 2008