China approves Yanzhou bid for Felix Resources

AP News
Posted: Dec 06, 2009 4:04 AM

Chinese regulators have approved a bid by state-owned Yanzhou Coal to take over Australian miner Felix Resources Ltd., the company said in a statement.

The statement, posted Friday on the Hong Kong Stock Exchange, said China's National Development and Reform Commission issued an approval letter Thursday.

The offer values Felix at 3.5 billion Australian dollars ($3.2 billion), making the deal China's biggest investment yet in the Australian minerals sector.

Felix shareholders approved the deal in August and the Australian government gave it the green light in October.

The A$16.95-a-share offer is the latest bid by a Chinese state-owned company to buy a chunk of Australia's raw materials to guarantee its steel-making and other construction industries can meet the demands of China's booming economy.

The progress of similar acquisition attempts by other Chinese state-owned companies has been rocky.

Debt-laden Rio Tinto in June abandoned a $19.5 billion bid from China's Chinalco to increase its stake in the Anglo-Australian miner to 18 percent, a deal that met investor resistance and opposition from some politicians who said it was against Australia's national interest.

China Minmetals Nonferrous Metals Co. Ltd. had to amend its bid for Oz Minerals after the Australian government said the Chinese company could not buy a mine located inside an Australian military area. The company eventually bought all of Oz Minerals apart from that mine for A$1.7 billion.