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BHP Billiton/Rio Tinto: Mayer Brown represents EUROFER before the European Commission and the German Federal Cartel Office

18 October 2010

Mayer Brown, a leading global law firm, advised EUROFER, the European Confederation of Iron and Steel Industries, before the European Commission and the German Federal Cartel Office in their opposition of BHP Billiton’s and Rio Tinto’s plans to create an iron ore production joint venture. Today, the companies announced to give up these plans. As the reason they stated, they had been advised that the proposal would not be approved in its current form by antitrust authorities as the European Commission, the German Federal Cartel Office as well as other authorities in Australia, Japan and Korea. Some regulators have indicated they would require substantial remedies whereas others have indicated they would be likely to prohibit the transaction.

The association of the European steel producers, EUROFER, has filed a formal complaint to the European Commission and was involved in the parallel proceeding as a third party before the Federal Cartel Office. The Mayer Brown team working on this included partner Dr. Jens Peter Schmidt (Brussels). In addition, antitrust specialists of the law firm advised on antitrust issues in China.

According to EUROFER, the incentives to stop or slow down investments in capacity expansions to reduce supply on the market and to drive up iron ore prices were too high. “It was a challenging case. In recent months the price finding for iron ore changed significantly which made constantly new analyses and evaluations regarding antitrust implications necessary” explains Dr. Jens Peter Schmidt.

The contemplated joint venture, which would have been valued at approximately 116 billion US Dollar, should have combined the iron ore deposits of the two raw material giants in West Australia. Iron ore is a critical input product for the steel industry. The contemplated joint venture prompted lengthy investigations of the antitrust authorities worldwide. The European Commission investigated, among others, the joint venture under cartel law; at the same time the German Federal Cartel Office investigated the project under national merger control law.

EUROFER represents the European steel industry (among others ThyssenKrupp, ArcelorMittal, Tata Steel/Corus and others). The European steel industry is the world leader in its sector with a turnover of 200 billion Euro and production of 200 million tons of steel per year. On behalf of its members the association was against the planned joint venture since its announcement back in 2009.

Mayer Brown often advises third parties in merger and antitrust proceedings.

For further information, contact:

Friederike Hartman
Director Marketing & Business Development
T: +49 69 7941 1045
M: +49 160 9019 2756

Dr. Jens Peter Schmidt
T: +32 2 551 5969
M: +32 497 44 97 94

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