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BHP shareholders say yes to Billiton merger

Gilbertson & Argus
Billiton CEO Brian Gilbertson (left), with BHP chairman Don Argus after announcing the merger proposal in March  

In this story:

Grilling for BHP directors

CEO Anderson to retire next year

Australia to account for 37 percent of assets

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MELBOURNE, Australia - Shareholders of Australian resources giant BHP approved a $30 billion (Aust$57 million) merger Friday with U.K.-based Billiton plc.

Their approval clears the way for the creation of a dual-listed company, BHP Billiton, that will be the largest diversified resources company in the world.

Just over 88.2 percent of BHP shareholders voted in favor of the deal. On Tuesday, 91.5 percent of Billiton plc shareholders gave their approval at a similar meeting in London.

BHP shares closed at a record high of A$22.85 Friday after reaching A$23.00 during the day. Billiton shares closed overnight in London at 380.75 pence, a 3 percent gain on the previous day's close.

Grilling for BHP directors

Friday's crucial vote in Melbourne came after BHP directors were grilled for more than three hours on the benefits of the merger, the premium being paid by BHP and the payout scheme for Billiton executives.

Several thousand BHP workers gathered outside the meeting venue to protest against the merger, claiming that it would cost jobs.

Ahead of the meeting, some analysts suggested BHP did not drive a hard enough bargain and that the $70 million payout to Billiton executives was excessive.

BHP chairman Don Argus told shareholders that the implied premium of 13 percent was in no way excessive.

"This is a friendly negotiated deal, without the emotion and often full premium required for a hostile bid," he said.

Argus argued that there was no alternative strategy that would deliver the same level of benefits.

CEO Anderson to retire next year

BHP chief executive Paul Anderson will run the merged group until he retires some time before December 2002, when he will be replaced by Billiton chief executive Brian Gilbertson.

Anderson told shareholders the merged company would have "a truly global scale" that would be "well and truly on the radar screens of international funds managers".

BHP is the world's third largest iron ore producer, the largest exporter of metallurgical coal, is a significant oil and gas producer and the world's fourth largest copper producer.

Billiton is one of the world's biggest producers of aluminium, nickel, copper, steaming coal and mineral sands.

Despite speculation that a merged BHP Billiton increasingly would be run from London, Argus said that the company would keep its global headquarters in Melbourne,.

Australia to account for 37 percent of assets

He pointed out that Australia would be the single largest region for the combined company, accounting for 37 percent of BHP Billiton's assets.

In addition, 52 percent of revenue would come from Australia and Asia.

BHP and Billiton announced the merger on March 19. They said the combined group would have pro forma revenue of $18.6 billion and pre-tax profit of $3.3 billion in the year to December 2000.

At the time, Anderson called the deal a "sensational fit" that would give the group an "exceptional breadth of assets and capabilities".

Gilbertson told investors in the UK on Tuesday that he wanted the integration of the two companies completed within six months.



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