BHP Group decided against making a firm offer for Anglo American Plc, instead walking away for now from what would have been the biggest mining deal in over a decade. <\/p>\n\n\n\n
The announcement \u2014 less than one hour before a 5 p.m. UK deadline \u2014 marked an abrupt end to the five-week public battle between two of mining\u2019s biggest names. <\/p>\n\n\n\n
It will ratchet up the pressure on Anglo Chief Executive Officer Duncan Wanblad to deliver on an ambitious turnaround plan, while his counterpart at BHP may have to look elsewhere for the copper growth that Anglo would have provided.\u00a0<\/p>\n\n\n\n
Anglo has repeatedly rebuffed proposals from BHP to partly break up and then acquire the 107-year-old company, but last week agreed to extend the cutoff to allow for talks. <\/p>\n\n\n\n
The two sides were unable to agree on BHP\u2019s complicated $49 billion (R906 billion) deal structure and Anglo said earlier Wednesday it saw no reason for another delay despite a last-minute appeal from BHP.<\/p>\n\n\n\n
A successful takeover would have created a commodities powerhouse that towered over its closest rivals, significantly increasing BHP\u2019s copper production at a time when miners and their investors are positioning for a prolonged period of tight metal supply and rising prices.<\/p>\n\n\n\n
BHP\u2019s decision to walk away instead of sweetening or changing its bid also reflects a new reality for the mining industry: the biggest producers have finally\u00a0returned to dealmaking\u00a0after years on the sidelines, but boards and managements are wary of angering investors after spending the past decade rebuilding their companies\u2019 reputations following a series of disastrous and expensive takeovers.<\/p>\n\n\n\n
The pressure is now on CEO Wanblad to show that Anglo can generate more value for shareholders as a standalone company, after unveiling a radical plan to overhaul the business earlier this month. <\/p>\n\n\n\n
Analysts and investors have also suggested that BHP or another rival could still target Anglo in the future, particularly if the company succeeds in exiting some of its less attractive businesses. UK takeover rules require BHP to stay away for six months unless Anglo receives a rival bid.\u00a0<\/p>\n\n\n\n
Anglo\u2019s shares fell 3.1% on Wednesday but remain well above the levels seen before Bloomberg first reported the takeover interest. Prices for key commodities including copper and iron ore have rallied over the same period. <\/p>\n\n\n\n
BHP first approached Anglo with a proposal in mid-April for the smaller company to spin off its majority stakes in two listed South African miners<\/strong> before an all-share acquisition of the rest of the group. <\/p>\n\n\n\n