It might take less time to develop a major minerals mine than to acquire a major minerals company. Nevertheless, the acquisition of Rio Tinto
A combination of BHP and Rio Tinto would, along with Brazil's Vale
Since early this year, BHP has had an offer of 3.4 of its shares for each Rio Tinto share on the table. It's an offer that Rio Tinto management has spurned, claiming it undervalues their company. It's also an offer that's been objected to by customers of the two companies -- including Chinese metals interests. Largely based on concerns in its government and its nation's steel industry, Aluminum Corp. of China
Despite Rio Tinto's opposition to the offer, the eventual likelihood of a deal is increasing with the slide in the target company's shares that has led to a doubling of the effective premium being offered by BHP in just the past month. It was nearly 18 months ago that I first broached the subject of a merger between the two mining behemoths. And while the combination won't occur until well into next year -- if at all -- BHP's obvious patience makes me willing to bet a little more each day that the long-running courtship will lead to an eventual marriage.
Given the slide in Rio Tinto's shares, Fools with a taste for natural resources might consider joining me in my wager.
For related Foolishness: