Rio Tinto drops Chinalco bid, announces new deal

Rio Tinto announces a $15.2 billion rights issue and a joint venture with BHP Billiton, scuttling a proposal by Chinalco to invest $19.5 billion in the natural resources company.

Rio Tinto on Friday cancelled a pending deal with Chinese state-owned enterprise Aluminum Corporation of China Chinalco, preferring to launch a $15.2 billion rights issue and enter a joint venture with Australian miner BHP Billiton.

The size of the rights issue coupled with the fact that it is fully-underwritten in two jurisdictions has resulted in a role for a number of banks. Credit Suisse, J.P. Morgan Cazenove and Macquarie are joint global co-ordinators -- a selection which likely...

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