BHP has made an offer to acquire its bigger resource rival, Anglo American in a mega transaction that if successful will shake up the global mining industry.
Anglo American confirmed on Thursday that it had received an unsolicited, non-binding and highly conditional combination proposal from BHP Group Limited. This followed media and mining industry speculation regarding the news.
BHP is however not interested in the iron ore and platinum group metals operations of Anglo American.
Anglo American Platinum and Kumba Iron Ore have been struggling against depressed metal prices and operational constraints in the key market of South Africa.
“The proposal comprises an all-share offer for Anglo American by BHP and would be preceded by separate demergers by Anglo American of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders,” Anglo American said in a statement.
Analysts said BHP was primarily targeting Anglo American’s copper producing assets under the proposed takeover bid. Duncan Wanblad, Chief Executive of Anglo American, said this week that the company had been “pleased with the performance in the first quarter, with copper production increasing by 11% as Quellaveco achieved its highest plant throughput rate, while Collahuasi and El Soldado in Chile benefited” from higher grades. flat(1) production overall for the Group compared to the same period of last year.
The disposal of Kumba and Amplats are conditional for the proposed transaction. Anglo American further said that its board was currently reviewing the acquisition proposal by BHP together with its advisers.
“There can be no certainty that any offer will be made nor as to the terms on which any such offer might be made. Pending any further announcements Anglo American shareholders should take no action.” said Anglo American.
BUSINESS REPORT