Anglo American rejects BHP takeover offer

 ·26 Apr 2024

Anglo American has rejected a takeover approach from its rival and the world’s largest mining company, BHP.

Anglo American received an unsolicited all-share merger proposal from BHP, which required the former to complete two separate demergers of its entire shareholding in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders.

Such a merger was considered the biggest shakeup in the mining industry in over a decade.

However, the Anglo American board said that the proposal significantly undervalues Anglo American and its future prospects.

“In addition, the Proposal contemplates a structure which the Board believes is highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent in the proposal, and significant execution risks,” said the group.

The board, thus, unanimously rejected the proposal.

“Anglo American is well positioned to create significant value from its portfolio of high quality assets that are well aligned with the energy transition and other major demand trends,” said the group.

“With copper representing 30% of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materialises.”

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders.”

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