HONG KONG (Reuters) - China’s Yancoal has gained Chinese regulatory approval for its $2.45 billion purchase of Rio Tinto’s Australian unit Coal & Allied Industries Ltd, the company said in a stock exchange filing on Sunday which also acknowledged Glencore’s counterbid for the assets on Friday.
The government-controlled Chinese company said it had received approval from China’s National Development and Reform Commission and the anti-monopoly bureau of the Ministry of Commerce for the deal.
In January, Rio said it was selling its interest in Coal & Allied Industries Limited to Yancoal’s subsidiary Yancoal Australia Limited for $2.45 billion.
Glencore on Friday made a counterbid for Coal & Allied offering $2.55 billion cash.
The terms of the Yancoal agreement allow Rio to engage in negotiations with another party if it made a better offer.
Glencore’s proposal is $100 million higher and fully funded, but Rio Tinto has to give Yancoal the chance to make a counter offer, opening the way for a bidding war.
“If Rio Tinto determines that the Glencore Proposal is a superior proposal, Yancoal Australia will have a right to match or better that proposal,” the company said in the filing on Sunday.
“Further announcement will be made by the company in accordance with the listing rules if it receives notification from Rio Tinto in relation to whether the Glencore proposal constitutes a superior proposal.”
In addition to receiving Chinese regulatory approvals, the deal has also received the green light from Australia’s Australian Foreign Investment Review Board and South Korea’s Fair Trade Commission.
Reporting by Michelle Price; Editing by Mark Potter