Rio Tinto expects regulators to clear Alcan deal

Mining giant Rio Tinto does not expect that its $A45.55 billion takeover of Canadian aluminium producer Alcan Inc will face any major hurdles from Australian financial regulators. Rio Tinto chairman Paul Skinner told a general meeting of Rio Tinto's British shareholders in London that the Australian Competition and Consumer Commission and Foreign Investment Review Board had started reviewing the deal. So far, he said, it was "business as usual" with both regulators and the takeover deal was on track to be wrapped up by the end of the year. "The process is ongoing with both of those (bodies)," Mr Skinner said. "Rio Tinto has had plenty of past history of contributing to and responding to both processes. "As far as we are concerned, they should both proceed normally and I wouldn't want to suggest anything unusual about the way they are happening. "Our expectation is that this transaction will complete in the fourth quarter." Rio Tinto, which launched its bid for Alcan in July, has already received the nod of approval from the Canadian Competition Bureau, US anti-trust authorities and the government of Quebec. While it waits for a decision from the two Australian regulatory bodies, its shareholders have begun voting on whether the deal should get their seal of approval. A small group of shareholders attended Rio Tinto's one-hour meeting in central London yesterday to vote in a secret ballot on the takeover. However, the results of the ballot will not be known until after the company's Australian-based shareholders hold their own vote in Melbourne on September 28. If the deal is approved, Rio Tinto will become the world's biggest aluminium producer. Rio Tinto chief executive Tom Albanese reiterated to shareholders in London that demand for aluminium continued to be strong, especially from China. "This year, there's over a 30 per cent increase in demand for aluminium for China," he said. "And while we're seeing some softening in the US, demand is stronger in China today than it was a few months ago. "If we were to continue to see 30 per cent type growth rates in China over the next several years global demand for aluminium will be greatly improved on what we are projecting." Mr Skinner also defended the price Rio Tinto was paying for Alcan amid questioning from some shareholders who thought it was "rather on the large side" and were worried about the $A47.82 billion the mining giant was borrowing to pay for the deal. Mr Skinner said the deal would be "value creating" for Rio's shareholders and the price was what the company had to offer in order to beat a rival offer Alcan had received from Alcoa. He added that while Alcan was proceeding with the sale of its packaging business, Rio Tinto would consider selling other parts of the Canadian aluminium producer, possibly its engineering products arm. "We have said that our intention in the first instance will be to retain that business but we will be looking after the takeover to see what fits and what doesn't fit," Mr Skinner said.