BHP (NYSE:BHP) Not Giving Up on Large Acquisition Targets

After failing to be allowed to acquire Potash Corp. (NYSE:POT) by the Canadian government, BHP Billiton (NYSE:BHP) had a lot of financial writers assume they may pull back and go after smaller acquisition targets.

According to BHP Chairman Jac Nasser that's not the case, and the company won't be lowering its target to go after what he called "second tier" assets.

Three huge failed deal attempts over the last couple of years has generated the speculation BHP may have to look for smaller assets to buy.

That's one of the problems companies the size of BHP face, is they have to acquire large targets in order to move the bottom line of the company, which CEO Marius Kloppers has been under pressure to do.

If BHP were looking only for mining assets and not general commodity assets, it would be understood that they would be very limited. But when they take into account all commodity or raw material sectors, there are a wider number of possibilities for them.

The challenge for BHP is the premium prices driving the market at this time after the majority of commodity prices have risen for some time.

An example of a company that would have made sense for them is Bucyrus (Nasdaq:BUCY), even though it was much smaller than Potash.

What Bucyrus has to offer is almost an immediate return on investment, and with the bull commodity market expected to continue on for years, even if there are temporary interruptions, Bucyrus would be the type of company, when added to a couple of more, which would have made sense for BHP.

Hitting several singles is as good as hitting a home run, but evidently BHP doesn't operate under those assumptions.