BHP Billiton announces demerger

BHP Billiton (NYSE:BHP) has announced its plans to form a new global metals and mining company based around its aluminium, coal, manganese, nickel and silver assets. The new company will be listed on the Australian stock exchange, with a secondary listing in South Africa.

"With a simpler portfolio, we are targeting sustainable, productivity-led gains of at least $3.5B per annum by the end of the 2017 financial year," says CEO Andrew Mackenzie.

The demerger will leave BHP Billiton focused on its long-life iron ore, copper, coal, petroleum and potash basins.

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Comments (10)
  • DougRk
    , contributor
    Comments (1916) | Send Message
    No idea if this is a good idea or not. But it's interesting that Kinder Morgan decides to merge all affiliate businesses while BHP does the opposite. It all seems like management make-work to look busy and forward thinking.
    19 Aug 2014, 04:16 AM Reply Like
  • Neurology
    , contributor
    Comments (167) | Send Message
    Premarket down 3-4% (BHP/BBL). Odd.
    (long BBL)
    19 Aug 2014, 04:45 AM Reply Like
  • Ted Fischer
    , contributor
    Comments (5260) | Send Message
    Supposedly some were looking for a share buyback and were disappointed.


    I don't personally have any idea whether this demerger is a good idea or not, but I trust their management.
    19 Aug 2014, 06:59 AM Reply Like
  • vandeley
    , contributor
    Comments (126) | Send Message
    Since the spinoff will only be listed in Australia it's likely UK shareholders want to get out before corporate action.
    19 Aug 2014, 07:30 AM Reply Like
  • Ted Fischer
    , contributor
    Comments (5260) | Send Message
    Ah, thanks.


    Do you know how the US treats dividends from Australian companies? There is no withholding (at least for IRAs) on dividends from UK listings.
    19 Aug 2014, 07:32 AM Reply Like
  • vandeley
    , contributor
    Comments (126) | Send Message
    I think 15% is withheld by the depository bank, which I believe can be claimed back since the dividend is 100% "franked" by the Australian Gov't.
    19 Aug 2014, 07:42 AM Reply Like
  • whatoncewas
    , contributor
    Comments (36) | Send Message
    WSJ point out some issues: (no buyback announced and shares of the spin-off entity trading in Sydney rather than London)


    Edit: More colour from Forbes:
    19 Aug 2014, 06:43 AM Reply Like
  • wimstarr
    , contributor
    Comments (9) | Send Message
    It looks to me like the unwinding of the Don Argus led acquisition of Billiton where BHP gave up ~40% of the company for assets that today generate very little.... NAB are also working through the Argus era of assets in the UK.... And Australian Cricket barely dodged the Argus bullet.... Brambles did not do too well either...
    19 Aug 2014, 07:38 AM Reply Like
  • Larry Harnar
    , contributor
    Comments (338) | Send Message
    So I saw in one of the reports that they raised the final dividend to $1.21 share. Can anyone confirm this? I usually look on the company website, but it appears to be down right now.


    19 Aug 2014, 09:07 AM Reply Like
  • salvatort
    , contributor
    Comments (421) | Send Message
    Yes, the total dividend for FY 2014 is $1.21, and will remain the same or even increase even after the spin-off.
    19 Aug 2014, 07:56 PM Reply Like
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