BHP Billiton has announced more details of its proposed offer for Rio Tinto, including a planned A$32.9 billion share buyback.
BHP said it expected the merged group would achieve US$3.7 billion in pre-tax cost savings by 2014. In three years the group would save US$1.7billion by removing duplication, and within seven years it would earn an extra US$2 billion a year from sales volume increases.
It said some of the biggest savings could be achieved by merging the pair's vast iron ore operations in Western Australia's Pilbara region and coalmines in the Hunter Valley and Queensland's Bowen Basin.
The deal had the unexpected outcome of sending Rio shares upwards and BHP downwards.
The pressure on BHP's share price resulted in the value of its share swap reducing in value the offer for Rio.
In the meantime, expectations are that BHP will have to substantially increase its offer.
Wellington Drive
Wellington Drive Technologies has received orders for 70,000 high-efficiency motors from United States firm Hill Phoenix of Virginia.
This follows extensive trials by the client which wants to use the motors in Hill Phoenix's refrigerated display case.
WDT was established in 1986 to develop and commercialise a novel brushless motor design containing minimal iron or steel.
The going has been tough for WDT with losses mounting as it battles to get its revolutionary motor accepted in major markets.
The company blamed the increased loss in 2006-07 on a higher New Zealand dollar, a write-off of stock not compliant with the European Reduction of Hazardous Substances regulations, and overheads slightly higher than forecast. Products were shipped to customers in 18 countries during the year, and samples were delivered to 86 prospects in 22 countries. It does seem to have reached a turning point with orders starting to roll in.
