The drums continue to sound for an effective de-merger of BHP-Billiton with the Financial Times reporting early this morning that the company is reviewing the merger.
According to the FT, it is “considering the sale of almost all of the businesses that Billiton brought to that deal – refocusing the Anglo-Australian company on BHP’s core operations from before the 2001 tie up.”
Driving this process is a recognition that when the original merger was done, the FT adds, Billiton businesses made up about 30% of earnings, but that this had since fallen to just 10%.
Like any business, a decade can bring great change and current CEO Andrew Mackenzie is said to be focusing on “a set of long-life mines and major oil and gasfields, in a few locations.”
Central to the strategy is also a focus on China and iron ore demand, with this part of BHP’s operations contributing “more than half of group earnings last year, up from just 12 per cent in 2000.”
It’s not like the merger has been a failure though, as the new entity has grown in value since.
It’s just a recognition that the world and its businesses have changed and the Billiton businesses might best be managed in others’ hands.
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