When BHP and Billiton announced their merger on March 19, 2001, they cited a combined market capitalisation of just $57 billion.
BHP shareholders were given 58% or $33 billion of that value and even to this day the ASX only provides the major newspapers with this portion of the company’s shares for their weekly league ladders of corporate market capitalisations.
The ASX today claims that BHP is capitalised at $149.7 billion but this ignores the 2.259 billion old Billiton shares which are traded on the London Stock Exchange. Put the two together and BHP-Billiton has 5.615 billion shares on issue so its market capitalisation has now cracked $250 billion, based on yesterday’s record close of $44.60. The stock was at $38.70 just last week so BHP’s value has surged by $33 billion in one week.
Six years ago, the then much diminished “Big Australian” was only our fourth most valuable company, trailing behind Telstra, News Corp and NAB.
Today’s its market cap exceeds the combined worth of those three companies. Indeed, this week’s 8% surge means that BHP’s market value now exceeds the combined value of our Big Four banks, which are worth about $242 billion.
Rio Tinto isn’t doing too badly either, although once again the ASX understates its true size by producing a market cap figure of just $49.35 billion. When you include the 996.8 million Rio shares traded in London, the company is actually worth $157 billion. Therefore, BHP and Rio Tinto are now together worth $407 billion, after netting off all debt.
There are a lot of $1 trillion milestones being reached at the moment. Australia is now a $1 trillion economy that boasts a $1 trillion superannuation pile and $1 trillion of household debt. Including all BHP and Rio Tinto shares on issue, the value of our top 20 companies is also now just a few billion short of $1 trillion.
Alexander Medvedev, the CEO of Russian energy giant Gazprom, has publicly claimed he wants to lead the world’s first $US1 trillion company, but as of this week his notorious gas exporting monopoly was only at $US257 billion.
US oil giant Exxon-Mobil is the world’s most valuable company with a market cap of $US502 billion.
With the US dollar plunging, it is just amazing that BHP-Billiton is up to 44% of Exxon’s value. How about a scrip bid for Exxon, boys? After all, if Rio Tinto can buy Canadian giant Alcan for $40 billion in cash, why can’t BHP go after Exxon?
View Stephen Mayne’s patriotic videoblog rave against Rio Tinto’s $40 billion Alcan takeover.
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