The Nikkei reported that the Japanese government will ask the EU to reject BHP Billiton's proposed merger with rival Rio Tinto on the grounds that a merger would adversely affect the domestic steel market.

 

The newspaper said that an official of the ministry of Economy, Trade and Industry will meet with an EU official to ask for the rejection.

 

The paper said that Mr Hiroyuki Ishige vice minister for international affairs at the trade and industry ministry will tell Mr Philip Lowe, director general for competition at the commission, this week that Japan and the EU should jointly act to block the merger.

 

The planned merger would have a big impact on Japanese, South Korean and Chinese steel mills, which depend more heavily on iron ore supplies from BHP and Rio than their European counterparts. But only the antitrust watchdog in the EU, where BHP is headquartered and lists its shares, has the effective means to penalize BHP if it ignores orders to preserve competition in the deal.

 

The EU commission has set a January 15th 2009 deadline for making a final ruling on deal, which has already been cleared by Australian and US and South African competition regulators.

 

 

Editor:    Ivy

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