While the Chinalco-Rio Tinto M&A deal may have collapsed, a round of new deals proposed by Rio will keep some law firms busy this year.
Following the cancellation of the US$19bn deal, Rio will now enter into two deals worth over US$20bn—a proposed US$15bn rights issue commencing around mid-July and a 50:50 JV with former merger partner BHP Billiton, valued at more than US$10bn.
Allens Arthur Robinson's Richard Spurio and Wendy Rae are acting on the US$15bn rights issue as Australian counsel to Rio alongside Linklaters as UK and US counsel, while Freehills partner Philippa Stone, assisted by senior associate Amy Goble, is representing the underwriters. Herbert Smith's Will Pearce and James Palmer, and Davis Polk & Wardwell's Nigel Wilson are acting as underwriters’ UK counsel and US counsel respectively.
The proposed capital raising will be the world’s largest non-financial rights issue this year and one of the most notable deals of the year for Allens.
“…Given the dual listed company structure of the issuers and the cross jurisdictional issues, it's safe to say this is one of the most complex [the firm has] undertaken,” said Rae. “We have had a team in place in Australia and internationally to ensure this matter is managed on a 24/7 basis given its global nature.”
The joint venture between Rio and BHP Billiton will combine the two mining giants' iron ore operations in Western Australia’s Pilbarra region—valued in excess of US$10bn. Blake Dawson's partners Leigh Warnick and David Williamson are leading the team for BHP, with Rio represented by Allens partners Nic Tole and Scott Langford.
"We've been delighted to be able to help BHP Billiton and to provide support to their legal team, led by Mike Ferraro, on this ground-breaking and very exciting transaction," said Blakes partner, Leigh Warnick.
It is understood that binding documentation for the JV is being drafted. BHP Billiton will pay Rio Tinto US$5.8bn to raise its interest in the JV, which is expected to be completed by mid-2010, to 50%.
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