With the completion of routine shareholder approval earlier this month, both BHP Billiton and incoming South32 head Graham Kerr are spruiking the benefits of the merger for both parties.
In addressing shareholders, BHP Billiton Chair Jac Nasser said the demerger of non-core assets into South32 would create more value than other alternatives such as divesting assets.
“For BHP Billiton, it means that we will have a greater focus on operating our core businesses and we will continue to do so in a safe and sustainable manner.
“The demerger of South32 simplifies BHP Billiton’s portfolio, while retaining the benefits of scale and diversification. We have 41 assets today, which would be reduced to a core portfolio of 19.”
In speaking to The West Australian, chief executive elect Graham Kerr said market commentators had underestimated both the strength of South32’s balance sheet, and the quality of the assets.
“These have been assets that to some degree haven’t had focus and love, and they’ve got a lot of potential,” Mr Kerr was quoted as saying in The West Australian.
“I think that people do underestimate the fact that we will start day one with a really strong balance sheet. We will start day one with a set of assets that are high quality, well maintained, that have generated cash through the cycle and they come with great people.”
South32 will added to the S&P/ASX 200 Index after close of trading today at zero price, which will be up weighted after close of trading on Monday.
