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Tata Steel sees merger activity as a logical extension of wider industry market forces
Following interest within the Australian media as to Tata Steel Limited’s position regarding any prospective merger of BHP Billiton and Rio Tinto mining interests, we intent to update media on the company’s formal position.
At a media conference in Sydney on Friday 30 Nov 2007 to announce a Joint Venture in Mozambique with Australian coal miner Riversdale Mining Limited, Tata Steel Managing Director Mr B Muthuraman was interpreted by some representatives within the Australian media as “supporting the deal” between BHP and Rio Tinto. He made his comments in contex of the prevailing trends rather on any particular development.
However, outside of its own transactions, Tata Steel hold’s no formal view as to the merits or value of individual mergers, and does not wish to comment on the activities or strategies of individual companies.
The company does however view this development to be consistent with its view regarding ongoing consolidation, as a result of global market forces, and expects to see more of these transactions across the resources sector in the future. In the short term, however, the BHP-RIO possible merger could cause iron ore price to rise and cause disadvantage to the steel industry.