BRUSSELS, Belgium (AP) -- BHP Billiton Ltd. said Tuesday that EU regulators had highlighted antitrust problems with its hostile bid for rival Rio Tinto Inc. that would create the world's largest iron ore miner.
The company said it had received a statement of objections from the European Commission -- a formal charge sheet that lays out how a deal may damage competition.
The EU executive said it would not comment.
Companies can try to defend the deal or alter it to win antitrust approval before regulators take a final decision to block or clear the combination.
BHP Billiton said it was continuing to work cooperatively with the European Commission and would respond to the EU to address the issues it raised.
Regulators have been scrutinizing the deal since July, saying they were worried about higher prices and reduced choice for European customers for metals and minerals.
Billiton's unsolicited takeover of Rio Tinto would combine the No. 2 and No. 3 iron miners and allow them to overtake Companhia Vale do Rio Doce, the world's largest iron ore miner.
Rio Tinto opposes the bid, saying BHP Billiton's offer undervalues it. BHP Billiton made a hostile, all-equity bid in February, then valued at US$147.4 billion, for Rio Tinto. At 3.4 BHP shares for every Rio Tinto share, the value of the deal fluctuates with share prices.
In May, European steelmakers urged EU Competition Commissioner Neelie Kroes to block the deal, saying it would create a company that could fix prices for steel's key raw material, iron ore that have surged this year.