China's largest steelmaker publicly raised the possibility yesterday of launching a counter-bid for Rio Tinto, the mining group that has received a $133 billion (€90 billion) takeover proposal from rival BHP Billiton.
Xu Lejiang, chairman of Bao-steel Group, China's largest steelmaker, said there was "a strong possibility" that the group would launch a bid for Rio Tinto, according to a Chinese business newspaper. "We are considering it, and the chance of putting forward a bid is high," Mr Xu was quoted as saying in the 21st Century Business Herald newspaper.
The comment came ahead of a scheduled high-level economic policy meeting in Beijing, chaired by president Hu Jintao, at which executives of China's largest energy and mineral companies are understood to have held discussions about how to respond to a possible BHP-Rio merger.
Any bid for Rio Tinto by a Chinese company is likely to trigger a political backlash in Australia, location of the Anglo-Australian company's coveted iron ore assets. The country last month elected Kevin Rudd, a Sinophile, as prime minister, but has in the past blocked foreigners from acquiring flagship energy assets.
Baosteel would need to offer more than $200 billion, Mr Xu said, but gave no details about how such a bid would be financed. Baosteel did not confirm the comments.
However, several Chinese steel executives and government officials have played down the reports. A possibility, according to analysts, is that Chinese companies might try to acquire a sufficiently large stake in Rio to thwart any bid.
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