Household name, BHP, has proposed a massive £31B acquisition of Anglo American, a UK-based mining titan. The offer is under review by Anglo American’s board, as confirmed by the company to the BBC. BHP, the world’s largest mining firm by market value, aims to bolster its copper resources through this deal.
Anglo American, valued at about £29B prior to the bid’s revelation, has a significant presence in nations such as Chile, South Africa, Brazil, and Australia. BHP, headquartered in Australia, boasts a market capitalization of approximately £119.5B.
According to Reuters, Anglo American’s management does not consider a proposed US$39B takeover offer from BHP Group as attractive, as some investors and analysts dismissed it as opportunistic.
BHP on Thursday offered Anglo’s shareholders £25.08 per share, a premium of 31% to the market close on Wednesday. It would take over Anglo after a spin-off of two assets. Reuters continued to state that, one of the sources said the offer did not address the complexities of demerging the Anglo-American Platinum, opens new tab and Kumba Iron Ore, opens new tab businesses in South Africa. BHP has until May 22 to come back with a binding bid.
The development follows BHP’s previous A$9.6B purchase of Oz Minerals. The successful merger would enhance BHP’s copper access via Anglo American’s South American operations, aligning with the rising demand for copper amid the clean energy transition.
Financial experts like Tim Waterer of KCM Trade attribute Anglo American’s attractive copper industry position as a key factor in BHP’s interest. Meanwhile, Susannah Streeter from Hargreaves Lansdown warns that the takeover could unsettle the City of London, noting Anglo American’s listing on the London Stock Exchange and BHP’s 2022 shift to a primary listing in Sydney.
In response to the takeover news, Anglo American’s stock price surged over 12% to £24.86 in early trading.
