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Latest update : 2008-07-07

Carmakers struggling to cope with soaring fuel costs are now having to face a surge in the price of steel. Some companies threaten not to pay surcharges on their contracts, but their bargaining power has been weakened by the slump in sales.

EU steps up scrutiny of BHP takeover of Rio Tinto


The European Commission on Friday opened an in-depth antitrust probe into mining giant BHP's hostile takeover of rival Rio Tinto over "serious doubts" the deal could stifle competition amid soaring commodities prices.
Europe's top antitrust watchdog said it would rule by November 2008 on whether to block 147-billion-dollar takeover or allow BHP Billiton to go ahead with plans to forge an unrivalled global resources giant.
"The recent surge in commodity prices has had a serious impact on the industries buying these commodities, their customers, and ultimately all the consumers in Europe and elsewhere," EU Competition Commissioner Neelie Kroes said.
"In this very sensitive context any change making the situation worse could be extremely harmful," she added. "Therefore the commission will pay particular attention to ensure that this takeover does not adversely affect competition in Europe."
The Brussels-based International Iron and Steel Institute (IISI) has called on antitrust regulators to block a tie-up of the two companies, warning that such a deal would create a "virtual monopoly" in iron ore mining.
The Eurofer European steel industry association has urged EU antitrust regulators to veto the deal, which it said would give the combined group a stranglehold on the iron ore market with a 40 percent share.
"The commission's initial market investigation has indicated that the proposed takeover raises serious doubts as to its compatibility with the (EU's) single market," it said in a statement.
"Concerns arise in particular as regards the markets for iron ore, coal, uranium and aluminium and mineral sands, because the proposed takeover could result in higher prices and reduced choice for these companies' customers," it added.

Date created : 2008-07-07