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Investors Can Buy Shares Of BHP Billiton Plc Or BHP Billiton Ltd.: What Is The Difference?

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Investors Can Buy Shares Of BHP Billiton Plc Or BHP Billiton Ltd.: What Is The Difference?

BHP Billiton — the global resources giant that is engaged in the exploration, development, production, processing and marketing of minerals — has its stock listed on several exchanges across the world.

BHP Billiton Limited (ADR) (NYSE: BHP) is listed an Australian based "limited" entity, while BHP Billiton plc (ADR) (NYSE: BBL) is listed as an England-based "plc" entity.

What is the difference between the two? Thankfully the company answers this question on its FAQ page.

According to the company, BHP Billiton was created when Australia-based BHP Limited (an Australian-based company) and Billiton Plc (a U.K.-based company) merged in 2001.

Related Link: Jefferies Upgrades BHP Billiton To Buy Amid Improving Fundamentals In Mining

The merger was effected by way of a Dual Listed Companies (DLC) structure, meaning that both stocks continue being listed separately but are run as one single entity with a common board of directors and management team.

The two listings offer equal economic and voting rights.

BHP Billiton Limited trades on the Australian stock exchange, and its corresponding ADR is listed on the American exchange under the ticker "BHP." BHP Billiton plc trades on the London Stock Exchange, and its corresponding ADR is listed on the American exchange under the ticket "BLT."

Differences Between Limited And Plc

Any company that is public in Australia and listed on the Australian Stock Exchange has the designation "Limited" or "Ltd." after its name. On the other hand, private companies hold the designation of "Proprietary Limited Company" or "Pty. Ltd."

Similarly, in England, a public limited company (plc) refers to a public company where shares are freely bought and sold to the public. The term is region specific and is the equivalent in the United States of a publicly traded company.

Bottom Line: There Really Is No Difference

In BHP Billiton's case, there is no difference between the Limited and plc designation as they essentially refer to the same thing — a publicly listed company where shares trade on the stock market.

Naturally, fluctuations in either the Australian or London stock market will create a divergence in prices among the two separate listed ADRs in the United States. Country specific events, such as the Brexit vote or a shift in the currency's value, could more severely impact the company's listed stock on one exchange compared to the other.

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