A smart take on a big deal from the WSJ's Heard on the Street column:
Mining companies are like sharks: if they don't keep moving forward, they'll eventually die.
From this perspective, news of BHP Billiton's largest acquisition in six years is welcome. The world's biggest mining company by revenue is at the top of its game, but if it wants to maintain its position long-term it needs to keep adding to its resources in the ground.
Still, the purchase of $4.75 billion of shale gas assets from Chesapeake Energy is another indication that BHP has grown so big that it is struggling to find a way forward.
Until now, the company had struck a distinctly bearish note on unconventional gas. Five years ago it sold out of Australia's biggest coal seam gas project, leaving it on the outside of a $20 billion investment boom. It then stood on the sidelines as Exxon, Total and other big rivals placed a series of bold bets on U.S. shale gas.
Having missed out on the low-hanging fruit, it is only now changing its mind after regulators and politicians first blocked an attempted to merge its Australian iron ore assets with those of rival Rio Tinto, and then scuppered a $39 billion takeover bid for Potash Corp. of Saskatchewan.
Shifting to natural gas makes some sense in that context: While BHP has an almost unseemly dominance in global markets for nearly a dozen key mined commodities, it is a minnow in petroleum. The political anxieties that put paid to the iron ore and potash deals are unlikely to stand in the way of a move into shale gas....MORE
And here's the view from the antipodes via Melbourne's Herald-Sun (another Murdochian enterprise):
BHP Billiton's shale gas deal strategic and opportunistic
