All eyes are on BHP Billiton Limited (NYSE: BHP) and Rio Tinto plc (NYSE: RTP) this week as a deadline for a mega-merger between the two quickly approaches. The UK Takeover Panel required that BHP submit a formal bid for Rio Tinto by February 6th or it will not be able to make any future bids for at least six months. The current offer is a 3-for-1 share deal that Rio Tinto rejected as bid that grossly undervalued their company. Many shareholders believe that the mega-merger may be stalled as the deadline quickly approaches.

BHP is a $190 billion company with mining interests all over the world. It specializes in petroleum, aluminum, base metals, stainless steel, iron ore, manganese, coal, and diamond and specialty products. Meanwhile, Rio Tinto is almost as large at $130 billion and it specializes in aluminum, copper, diamonds, energy products, gold, industrial minerals and iron ore. Combined, these two companies would corner 38% of the iron ore market, 6% of the copper market, and become the world’s largest coal supplier. As a result, many eyes are on this potential merger.

Interestingly, there may be others that are also interested in Rio Tinto. Alcoa and Aluminum Corporation of China announced the joint acquisition of 12% of the company just recently. The two described the acquisition as a “strategic stake” and reserved the right to make a bid for the company if a third party made a firm offer. Presumably, if BHP made an offer, then a bidding war may ensue for Rio Tinto, which is great news for its shareholders but potentially bad news for many others.

In the end, it will be interesting to see how this situation unfolds. BHP has its own earnings to deal with this week, but the February 6th deadline is quickly approaching and they may be forced to act if they want to make a serious attempt to buy Rio Tinto. Combined, these factors make this stock one that is definitely worth watching!

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