Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, June 5, 2009

Article Excerpt

BHP BILLITON LTD., $60.29, New York symbol BHP, rose 6% on Friday after it agreed to merge its iron-ore mining operations in Western Australia with those of Rio Tinto Ltd. (New York symbol RTP) into a 50/50 joint venture. The partners will split the output equally, and each will sell it through their own marketing divisions. BHP is the world’s largest mining company, with major operations in Australia, South Africa, Chile and the U.K. It produces iron ore, coal, oil, aluminum, manganese, diamonds and titanium. As part of the deal, BHP will pay Rio Tinto an additional $5.8 billion because its Australian iron-ore operations are not as valuable as Rio Tinto’s. To put this figure in context, BHP earned $6.1 billion, or $2.20 per ADR, in the six months ended December 31, 2008. (Each BHP American Depositary Receipt represents two BHP common shares). Australian competition regulators need to approve the merger, but it should close in mid-2010. The two companies feel…
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