The European Commission is likely to announce a probe into BHP Billiton's $147 billion take-over proposal for the Australia and UK-listed mining group Rio Tinto Plc, with Europe's steel lobby Eurofer mounting opposition and urging regulators to take a hard look at the proposed merger.

Rio Tinto, however, said the sweetened offer too undervalues its mining assets.

The Brussels-based European Confederation of Steel Industries (Eurofer) said it is worried that the deal will reduce world's iron ore suppliers from three to two.

Eurofer spokesman Axel Eggert said Eurofer officials voiced their concerns about 10 days ago in a meeting with antitrust regulators as well as in a preliminary filing.

"Today already two-thirds of the world's iron ore market are controlled by three companies. If there are only two, then this will reduce any competition significantly," said Eggert.

A combined BHP-Rio Tinto would have a market share of almost 40 per cent, bypassing the 33 per cent held by Brazil's Companhia Vale do Rio Doce.

Brussels-based International Iron and Steel Institute had also voiced similar concerns about the deal. Institute spokesman, Nicholas Walters, said the group would gladly provide any information needed by competition authorities around the world to examine the deal.

EC officials must, however, await notification from BHP of its bid plans before beginning a probe.

Once EC regulators receive notification of the planned takeover, they have a month to conduct a preliminary investigation.

Meanwhile, China's acquisition of a blocking stake in Rio Tinto may also become the subject of an investigation by Australia's Foreign Investment Review Board.