SYDNEY/LONDON (Reuters) – British multinational miner Anglo American (JO:AGLJ) said on Thursday it had received an all-share buyout proposal from the world’s largest listed mining company, Australia’s BHP Group (NYSE:BHP).
London-listed Anglo American, which owns mines in countries including Chile, South Africa, Brazil and Australia, had a market capitalisation of $36.71 billion as of Wednesday’s close, according to LSEG data.
The deal, if agreed, would give BHP access to more copper, one of the most sought after metals in the clean energy transition, and potash, two of its strategic commodities, as well as more coking coal in Australia.
It could also trigger a wave of transactions for any unwanted assets such as iron ore, nickel and diamonds, where Anglo owns 85% of industry giant De Beers.
“There can be no certainty that any offer will be made nor as to the terms on which any such offer might be made,” Anglo American said in a statement, adding the unsolicited proposal is non-binding and highly conditional.
The company said its board was reviewing the proposal and did not disclose the share ratio on offer.
BHP declined to comment when asked about earlier reports about preliminary talks with Anglo American.
A deal would be conditional on being preceded by separate demergers by Anglo American of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore to its shareholders.
Under UK takeover rules, BHP has until May 22 to make a firm offer.
BHP, best-known for mining iron ore, copper, nickel and coking coal, had a market capitalisation of about $149 billion as of Wednesday. The Australian market is closed on Thursday for a public holiday.
If the Anglo American deal came to fruition, it would be the second major acquisition for BHP in about a year after its 2023 purchase of Oz Minerals.
The proposal comes as BHP chair Ken MacKenzie approaches the final stretch of a nine-year term at the miner he has steered since 2017.
Anglo American said in February it would embark on a review of assets after a 94% plunge in annual profit and a series of writedowns. It has seen a fall in demand for most of the metals it mines and took a $1.6 billion impairment charge on its De Beers diamond business.
The global mining sector has seen a recent slew of merger and acquisitions despite rising concerns around the economic outlook of one of the world’s largest metals buyer, China.
More broadly, M&A activity has registered an uptick in the first few months of this year, including mega deals.
Both of the mining firms have recently identified potash as an important business which would complement their mining operations as food demand grows.
BHP is currently focusing on its Jansen potash project in the Canadian province of Saskatchewan whereas Anglo American has its hopes on the Woodsmith potash mine in Yorkshire.
($1 = 1.5396 Australian dollars)
Source: Economy - investing.com
