Australian regulator OKs Chinalco's bid for Rio

Australia's competition authority said Wednesday it will not oppose the $19.5 billion bid by Aluminum Corp of China, or Chinalco, for a stake in miner Rio Tinto, ruling that the investment wouldn't lead to a substantial lessening of competition in the sector.

The Australian Competition and Consumer Commission announced its finding Wednesday in a statement on its Web site. The agency said the proposed investment by Chinalco would not contravene Australia's 1974 trade-practices act, which forbids mergers and acquisitions that would be likely to substantially lessen competition.

Australia's Foreign Investment Review Board is also reviewing the proposed acquisition. The FIRB is set to assess the deal to determine whether the proposed investment is in line with Australia's national interest.

The ACCC ruled that Chinalco's proposed partial shareholding in Rio would not give it leverage to influence global iron-ore prices to benefit Chinese steel makers. "The ACCC concluded that Chinalco and Rio Tinto would be unlikely to have the ability to unilaterally decrease global iron-ore prices below competitive levels," the authority said in its the statement.

The ACCC said it also had reviewed the Chinalco bid in relation to the supply of bauxite, copper and alumina, and found limited direct overlap of operations in those areas that could affect Rio Tinto's pricing.

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