BHP Billiton raises offer for Rio Tinto to $147 billion

BHP BillitonMumbai: BHP Billiton, the world's largest mining company, has launched a sweetened $147.4 billion bid for London-based rival Rio Tinto.

In the world's largest-ever take-over bid, Melbourne-based BHP sweetened its earlier offer of 3 shares for every Rio share to 3.4 shares for each share of Rio, the company said in a statement.

BHP said Rio shareholders would hold 44 per cent of the merged entity, compared with 36 per cent in the earlier proposal.

Rio TintoRio had rejected BHP's original three-for-one all-stock offer made on November 8 as it "undervalued" its mines and growth prospects. (See: BHP Billiton may have to offer a 60-per cent premium for hostile takeover of Rio Tinto)

A combination of the world's top two mining companies would create the world's third richest company, with a market capitalisation just below Exxon Mobil and General Electric.

BHP, however, needs support of at least 50 per cent of shareholders of both Rio's Australian and London units for a deal.