EU delays probe of BHP-Rio deal, awaits information

BRUSSELS/LONDON (Reuters) - The European Commission has delayed its review of plans by BHP Billiton (BHP.AX) (BLT.L), the world's largest mining group, to acquire rival Rio Tinto (RIO.L) as it awaits more information.

BHP said it was confident the EU executive would eventually grant approval for its proposed all-share takeover currently worth $130 billion, however, and said Tuesday's move to stop the clock on the investigation was a normal part of the process.

The suspension was "due to a request for information made on August 13 by the Commission which has not been fulfilled by the parties," the Commission said in a note listing the status of its merger reviews.

The decision was taken on September 1, with the first day of the suspension being August 25. "A new deadline will be set once the information is received," it said.

BHP's bid includes a pre-condition that it gain approval from regulators in Europe, Australia and elsewhere before sending out formal offer documents to shareholders. It has said it expects the approvals by the end of the year.

"Suspensions are a normal part of phase two investigations under the EC merger regulations," BHP spokesman Ruban Yogarajah said. The company was working to provide the requested information, he added.

"BHP Billiton remains confident that all the regulatory preconditions for its offer for Rio Tinto can be satisfied."

Rio Tinto, which has spurned the bid as too low, declined to comment on the EU statement, but a spokesman said the firm has said it would provide any information requested for the review.

IRON ORE CONCERNS

BHP shares traded 4.6 percent lower in London at 15.72 pounds at 1213 GMT, with Rio shares down 3.9 percent at 48.13 pounds, compared with a 3.9 percent fall in the UK mining index .FTNMX1770. Both stocks were down on lower metal prices before the announcement by the Commission.

The all-share offer would create a mining group controlling more than a third of the world's seaborne trade in iron ore, the main raw material for steelmaking.

Rio Tinto and BHP are the world's second- and third-largest iron ore producers, respectively, behind Brazil's Vale (VALE5.SA) (RIO.N).

On July 4, the Commission opened an in-depth, second-phase investigation into BHP's unsolicited bid and issued a tough statement with a list of sweeping concerns.

"Concerns arise in particular as regards the markets for iron ore, coal, uranium and aluminum and mineral sands, because the proposed takeover could result in higher prices and reduced choice for these companies' customers," the Commission said.

Annual contract prices of iron ore nearly doubled this year driven by heavy demand from China for infrastructure development.

On August 22, Australia's antitrust regulator said a takeover of Rio by BHP could raise competition issues in iron ore, but not in other commodities.

In a nine-page "statement of issues" ahead of its October 1 ruling, the Australian Competition and Consumer Commission highlighted the likely impact of a deal on the iron ore trade and, in particular, on Australian steelmakers, but saw no major competition issues in copper, gold, uranium, bauxite or alumina.

(Reporting by Mark John; Additional reporting by Eric Onstad in London; Editing by Sue Thomas and Quentin Bryar)