The Melbourne-based giant made the announcement yesterday it would offer $7.85 per share for the entire issued capital of WMC.
WMC’s board recommended the offer noting it was $0.85 per share higher than Xstrata's bid. Meanwhile Xstrata, which opened the bidding in November, said it would not increased its offer which closes on March 24.
"The acquisition of WMC Resources is a further step in BHP Billiton's strategy of developing, operating and maximising the performance of large scale, long-life, low-cost assets,” BHP Billiton chief executive officer Chip Goodyear said.
“It is an excellent opportunity to build on our existing nickel and copper businesses and bring uranium into our suite of energy products. Furthermore, the acquisition provides additional premium long-term options to satisfy continuing demand growth in China and other high-growth economies.”
BHP Billiton is pushing the argument that it is best placed to maximise the value of WMC’s assets because it already has established copper and nickel operations. IBHP Billiton produces around 1 million tonnes per annum of copper while WMC's Olympic Dam operation in South Australia produced 224,000t last year.
WMC's Australian nickel operations produce around 100,000t per annum, while BHPB has the 32,000tpa Yabulu nickel refinery in Queensland, the developing 50,000tpa Ravensthorpe laterite nickel project in Western Australia, and the 55,000tpa Cerro Matoso operation in Columbia.
WMC’s major growth asset is the Olympic Dam uranium resource, which also contains the world's fourth largest copper resource and one of the world's 10 largest gold deposits.
Uranium is a new commodity for BHP and would complement the existing energy portfolio of oil, gas and coal, Goodyear said.
Uranium could provide a partial solution to cutting greenhouse gas emissions and provide a natural hedge for BHP’s fossil fuel output, The Australian pointed out.