Mining giant BHP launches bid to takeover rival Anglo American

The company logo adorns the side of the BHP global headquarters in Melbourne, Australia on February 21, 2023. Photo: AFP

The company logo adorns the side of the BHP global headquarters in Melbourne, Australia on February 21, 2023. Photo: AFP

Published Apr 25, 2024


British mining heavyweight Anglo American confirmed on Thursday it was "reviewing" a takeover bid from its larger Australian rival BHP, in potentially one of the sector's biggest deals in years.

Anglo American did not disclose the price of the "unsolicited" offer, which must be sewn up before a deadline of May 22, in what could rank as this year’s biggest deal.

BHP's offer would first hinge on Anglo American splitting off its platinum and iron ore operations in South Africa.

Australian-based BHP has a market value of around $148 billion (R2.8 trillion), while London-based Anglo American has a market value of about $36bn.

"The board is currently reviewing this proposal with its advisers," Anglo American said in a statement.

"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."

BHP declined to comment.

BHP, already one of the world's largest mining operations, has recently been buffeted by plummeting nickel prices as well as legal costs related to a 2015 mining disaster in Brazil.

Anglo American earlier this year announced plans to cut thousands of jobs across its slumping platinum operations in South Africa.

Anglo American is an attractive acquisition due to its copper assets.

On Wednesday in a production report for the first quarter ended March 31, 2024 Anglo American said that its copper production increased by 11% reflecting higher throughput at Quellaveco in Peru. Copper production increased by 11% to 198100 tons, driven by a 21% increase from Quellaveco and a 6% increase in Chile’s production.

BHP has a reputation as one of the most active M&A players in the mining industry.

BHP Group CEO Mike Henry has previously said BHP had to secure more options in copper and nickel, given future demand from electrification, decarbonisation and rising living standards.

In February BHP reported an 86% slump in half-year net profit on Tuesday, hit by a writedown of its nickel assets and costs related to a 2015 Brazilian mining disaster.

Sales rose 6% to $27.2bn in the six months to December 31 when compared to a year earlier, the Anglo-Australian firm said.

But net profit slumped 86 percent to $927 million in the same period as it took a hammering from exceptional items.

BHP posted losses of $2.47bn on writedowns of its nickel assets in Western Australia and another $3.17bn over the fatal collapse of the Samarco iron ore tailings dam in Brazil.