(Reuters) – Australia’s treasurer has told business representatives he would not allow Glencore Plc to merge with Rio Tinto due to concerns about losing tax revenue, a person familiar with his comments said on Wednesday.
Treasurer Joe Hockey said based on the tax implications he had seen from the treasury, he would not allow a Glencore takeover of Rio, Australia’s second biggest miner and one of its biggest taxpayers, the person said. He declined to be identified due to the sensitivity of the issue.
Treasurer Joe Hockey’s office declined to confirm the comments. Four people said Hockey had spoken at a private meeting on March 30 organized by the Business Council of Australia and including members of the Minerals Council of Australia, but three would not give details.
Glencore approached Rio Tinto about a merger last July that would have created a $160 billion mining and commodities trading giant. Rio revealed in October it had rebuffed the approach, but under UK takeover rules, Glencore is now free to make a new bid, following a six-month breather.
“Any takeover would have to go through the normal processes at FIRB (Foreign Investment Review Board),” a spokesman for Hockey said.
Australia’s treasurer has the final say on any takeovers by foreign companies, based on recommendations from FIRB.
Hockey’s comments were first reported by the Australian Financial Review on Wednesday. Citing multiple sources, it reported the treasurer said there was “no way” he would allow a Glencore takeover of Rio Tinto “on my watch”.
Hockey stunned investors in late 2013 when he blocked a A$2.8 billion takeover bid for Australia’s largest agribusiness, GrainCorp by Archer Daniels Midland Co, saying it was against the national interest.
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