BHP to Acquire British Mining Group

BHP Ltd. of Australia agreed today to acquire London-based mining group Billiton in a transaction that would create the world’s biggest mining company with a market capitalization of about $28 billion.

Shares in the new company, called BHP Billiton, will trade in London and Sydney, Australia, and be split 58% to 42% in BHP’s favor, BHP said in a statement to the Australian Stock Exchange. BHP Chief Executive Paul Anderson will become chief executive of the new company.

Mining companies have been merging in the last year to cut costs as commodity prices fall. BHP has largely eschewed takeovers in the last year, instead focusing on cutting costs and shedding unprofitable units, while rivals Anglo American and Rio Tinto Group spent billions to acquire more mines.

BHP and Billiton had combined sales of $18.6 billion last year.