Failed to buy Rio Tinto dream of crushing China's ore price negotiations to increase the difficulty

--the other party turned to BHP Billiton for a 1.5 billion breakup fee. Rio Tinto, the world's third-largest mining company, abruptly announced yesterday that it had abandoned its $19.5 billion-dollar tie-up with Chinalco, the parent company of Chinalco (2600), to rival BHP Billiton (BHP Billiton) Zhang Yizheng. The formation of iron ore joint ventures and the reduction of debt by way of stock. This has been hailed as "China's largest overseas acquisition," the deal failed. 　　Chinalco was disappointed with the results and, in the light of earlier agreements signed by the two sides, the Chinalco could receive a break-up fee of USD 195 million (about HK $1.521 billion) after the cancellation of the deal. With a plan to raise $15.2 billion for the Rio Tinto issue, investors are holding 40 shares per share of 1,400 pence for 21 shares, at a discount of 49% from the London closing price the day before yesterday. In addition, BHP also agreed to pay Rio Tinto group 5.8 billion U.S. dollars, a group of Australian iron ore joint venture. 　　The money it raises through the issuance of capital-raising shares and joint ventures will allow Rio to reduce its $38.9 billion trillion in debt by selling its largest mine stake to Chinalco. Rio Tinto's share price soared 13% amid news of the announcement, Rio Tinto's shares surged to a 7-month high, soaring 13% to 75.75 Australian dollars, and 28.29 AUD for nearly 3 times times the share price, while BHP Billiton rose 10% to 38.6 AUD. 　　As for the Chinalco H shares, the lowest had fallen by nearly 5% per cent and the closing decline had narrowed to 2.07% and was reported at $8.06. BHP last February offered a 1-share takeover offer to Rio Tinto, only to reject the offer, which it thought was a big underestimate of the company's value and future prospects, and to abandon the takeover plan after a sharp fall in commodity markets in November. As a result of the tightening of the credit market and the collapse in commodity prices in February this year, Rio Tinto was in a deal with Chinalco to invest in Rio Tinto in a 19.5 billion dollar strategy for its eagerness to repay half of its $38 billion trillion debt, but failed to raise cash by selling assets. 12.3 billion of those assets, including Rio Tinto's main iron ore, copper and aluminium mines, will also subscribe to Rio's $7.2 billion convertible bond, allowing it to double its stake in Rio Tinto to 18%. 　　Chinalco has already completed a 21 billion dollar financing arrangement for the deal. China's ore price talks are harder to come by, but when the deal is announced, it will have to cross hurdles, including Rio Tinto shareholders and Australian politicians, some of Rio's shareholders, who think they are giving Chinalco a bigger stake than other shareholders, and fear that China would influence the price of important commodities such as iron ore. 　　Rio Tinto yesterday said it had decided to terminate the deal because of recent market moves that had reduced its value to Chinalco. Market analysts say Rio Tinto's tie-up with BHP will further boost global iron ore monopolies and negotiating rhetoric, and will pose a huge challenge to China, the world's biggest iron ore consumer, and it is becoming harder for China this year to get more expensive ore prices than Japan.。 Chinalco calls for strategic investment opportunities China Iron and Steel Industry Association, Deputy Director of Economic Research Center Chen Ling, the two big Miners Alliance of course is to enhance the two-ore negotiations of the determination and confidence, so that two more easily coordinated, increase the difficulty of China's negotiations. 　　But insiders say China will not change its stance on iron ore negotiations. Xiong, general manager of Chinalco, said that Rio Tinto's single largest shareholder would be concerned about Rio's plans to implement a rights issue and the development of a joint venture with BHP in the Pilbara region of Western Australia. The company will not therefore change the strategic objectives of the internationalization of polymetallic mining enterprises, will actively participate in the global mining industry in the common development, continue to seek strategic investment opportunities, and unswervingly strive to achieve strategic objectives. 　　Chinalco currently holds 12% per cent stake in the UK-listed Rio Tinto. Chinalco to go out of the event book February 12, 2009: Chinalco and Rio Tinto signed a 19.5 billion-dollar cooperation agreement to create a record of overseas investment by Chinese companies. About 7.2 billion dollars are used to subscribe to the convertible bonds issued by Rio Tinto, with a net coupon of 9%. 　　Chinalco may choose to swap at any time within the term of the swap, with the overall shareholding to be increased from 9.3% to about 18% per cent, with the shares of Rio Tinto UK companies up to 19%, holding 14.9% per cent of Rio's Australian shares. February 16: BHP Billiton's takeover of Rio Tinto assets is more desirable than Chinalco's acquisition, according to a major Rio shareholder. 　　If BHP Billiton launches a new round of acquisitions, they will provide financing. March 17: The British Observer said that Rio Tinto shareholders were dissatisfied with the "low price" of their equity and assets and sought legal means to force the group to agree that its agreement with Chinalco would require 75% shareholder approval before the agreement could take place, with only 50% shareholder support. 　　The Australian Foreign Investment Review Board (FIRB) announced on the same day that it would extend its review of transactions for another 90 days on the basis of the original 30-day review period. 　　March 26: The Australian Competition and Consumer Council (ACCC) said it would not oppose the deal because the deal would not reduce the price of iron ore around the world. 　　May 5: Mr Wang, chairman of Chinalco Overseas Holdings, quoted by the FT as saying he was opposed to changes to the company's 19.5 billion dollar investment in Rio Tinto, despite pressure from Rio Tinto shareholders. 　　May 15: Chinalco and Rio Tinto announced the approval of the US Foreign Investment Commission (CFIUS) for Rio Tinto's proposed issuance of a convertible bond to Chinalco. June 5: Chinalco confirms that Rio Tinto has revoked the deal signed by the parties on February 12 and has paid a 195 million dollar break-up fee to Chinalco.