By Rogerio Jelmayer
February 7, 2008
SAO PAULO (Dow Jones)--Brazil's government will press to make certain that control of
Vale do Rio Doce (RIO) remains in Brazilian hands but doesn't see any other obstacles in ongoing takeover talks between the mining giant and Anglo-Swiss mining group
Xstrata PLC (XTA.LN), a top Brazilian official said Thursday.
"Control should remain in Brazil," Luciano Coutinho, president of the Brazilian Development Bank, was quoted as saying by the Estado news agency. "But it is perfectly possible to conciliate that with Vale's purchase of Xstrata."
The development bank, or BNDES, is controlled by Brazil's federal government.
Coutinho said he has made the government's position clear in personal talks with Vale President Roger Agnelli.
Brazil's government holds a 5.5% direct stake plus 12 golden shares in Vale, while also influencing larger stakes controlled by the BNDES, through the bank's BNDESPar investment arm, and Previ, the pension fund for state-run bank Banco do Brasil. The golden shares, which date from the 1997 privatization of Vale, give Brazil's government veto powers over key company decisions.
Government officials in recent weeks have expressed concerns that Vale's eventual acquisition of Xstrata would be expensive and complicated, and that it might put a large slice of the company into the hands of foreign investors.
A possible deal is estimated at between $80 billion and $90 billion. Key Xstrata shareholder Glencore International AG has said it is willing to accept $30 billion worth of Vale preferred shares for its nearly 35% stake in Xstrata.
Source: Dow Jones Newswires
Official: Mining Giant Vale Should Stay Brazilian - Estado
