ETFs For BHP's Next Acquisition Target

Poor BHP Billiton BHP. The world's largest mining company can't seem to get a big deal done under any circumstances. The recent record of scorn includes a failed all-out bid for Rio Tinto RIO in 2008, a recently failed iron ore joint venture with Rio and of course the blocking of BHP's $38.6 billion hostile bid for Potash Corp. of Saskatchewan POT. With the Potash deal probably dead, attention now turns to companies that BHP could try to acquire next. As has already been noted, UBS said Anadarko Petroleum APC and Australia's Woodside Petroleum could be takeover candidates for BHP. With that, let's look at some ETFs that could be plays on BHP's next attempted acquisition. 1) Market Vectors Agribusiness ETF MOO: The thesis here is simple: Just because Potash and the Canadian government spurned BHP, doesn't mean another fertilizer company would do the same. Mosaic MOS and BHP? Not terrible consolation after missing out on Potash. 2) iShares MSCI Australia Index Fund EWA: An obvious choice as BHP accounts for over 14% of EWA's weight and Woodside is also among EWA's top-10 holdings. 3) iShares Dow Jones US Oil & Gas Exploration & Production Index Fund IEO: Anadarko makes for a logical acquisition target for BHP given BHP's presence in the oil and natural gas businesses and the Texas-based company would come much cheaper than Potash. Anadarko gets a 5.4% weight in IEO. 4) Market Vectors Coal ETF KOL: BHP is big in coal as well and some of KOL's lesser known foreign constituents could make for a compelling target for the Anglo-Australian mining giant.