For BHP Billiton, World's Largest Mining Co., Breaking Up Isn't Hard to Do

NEW YORK (TheStreet) -- Normally a full-year earnings disclosure is all about the numbers, but the new statement from the world's largest mining company BHP Billiton (BHP)   is different. The key message the company is giving is that it is too large and diversified now to be managed optimally -- and that change has to come.

And this is a big change.

For the last few months -- especially in the healthcare and technology sectors -- one of the most compelling themes in the global stocks markets has been a sharp uplift in merger and acquisition activity. BHP Billiton's announcement is the polar opposite of this. In essence, by unbundling the company's aluminium, coal, manganese, nickel and silver divisions, the company is reversing the merger of BHP and Billiton that occurred in 2001.

It is breakup time.

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The global mining giants have been getting bigger and taking more market share over the last 15 years. The rationale for this has been simple: voracious demand from China created the opportunity, and bigger profits were available from striking larger and larger supply deals.

TheStreet's Ruben Ramirez speaks with The Deal's Paul Whitfield about the details of the breakup:


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