BHP Billiton – the world’s biggest miner – has announced it will shift a number of its businesses into a separate company in order to focus on its most profitable activities.<br /><br />In essence it is a demerger as most of them were acquired by BHP when it merged with Billiton in 2001. <br /><br />The new entity, worth an estimated $16 billion (12 billion euros), will include aluminium, manganese, nickel, silver, lead and zinc, as well as coal mines in some countries.<br /><br />The move to simplify BHP Billiton around production of iron ore, copper, coal and petroleum is intended to boost cashflow growth and profit.<br /><br />Investors were not impressed and the share price fell, but analysts said that was because the company did not announce a special dividend or a buy back of the stock and that the sell-off was overdone. <br /><br />BHP has said it wants to pay down its debt before returning capital to shareholders.<br /><br />Chief Executive Andrew Mackenzie, who has been in the top job for just over a year, said: “By concentrating on what we do best, the development and operation of major basins, we can improve our productivity further, faster and with greater certainty.”<br /><br />The new company will be headquartered in Perth and listed in Australia, with a secondary listing in South Africa. Shareholders in BHP Billiton Ltd and BHP Billiton Plc would receive shares in the new company on a pro-rata basis.<br /><br />BHP confirmed the spin-off as it reported an 8 percent rise in second-half underlying attributable profit to $5.69 billion (4.27 billion euros), just below forecasts.
