Yancoal agreed to accelerate all deferred payments and make a single payment of $2.45 billion at completion to purchase the C&A assets plus coal price-linked royalty. Rio Tinto will also receive a receipt of confirmation from Yancoal that it has received or will waive all the regulatory approvals that are conditions precedent to its ability to close, including Chinese regulatory approvals from the National Development and Reform Commission (NDRC), the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and the Ministry of Commerce of the People’s Republic of China (MOFCOM), the State Administration of Foreign Exchange of the People’s Republic of China (SAFE) and Australian regulatory approvals from the Foreign Investment Review Board (FIRB), the Australian Competition & Consumer Commission (ACCC) and the NSW Minister for Resources.

Glencore did not secure clearance from various jurisdictions including Australia (FIRB and ACCC) and China (MOFCOM) or from the Korean or Taiwanese authorities and there was uncertainty that these approvals could be achieved in a timely manner. The expectation was that it would be a much faster completion timeframe under Yancoal’s proposal.

“We believe Yancoal’s offer to purchase our thermal coal assets for $2.45 billion offers the best value and greater transaction certainty for shareholders,” said Rio Tinto Chief Executive J-S Jacques. “Yancoal’s revised offer is the most attractive because it removes the deferred payment structure, can meet the timeline we have set for the transaction, and has given us certainty regarding the outstanding regulatory approvals required.”

The transaction requires the approval of Rio Tinto shareholders and the general meeting has been scheduled for June 27 and the Rio Tinto Ltd. general meeting has been convened for 29 June 29. The transaction is expected to be completed in the third quarter of 2017.