Anglo American Declines £31.1 Billion Takeover Offer from BHP

Anglo American has turned down a £31.1 billion takeover bid from rival miner BHP, dismissing it as “highly unattractive” and “opportunistic.”

BHP confirmed the proposal on Thursday, aiming to create the world’s largest copper producer through the merger. However, Anglo American rebuffed the offer, particularly objecting to BHP’s plan for significant restructuring of its operations.

The primary interest of BHP lies in acquiring Anglo American’s copper operations, driven by the increasing demand for copper in renewable energy and electric vehicle sectors. Anglo American holds significant copper assets in Chile and Peru, where BHP also operates.

While the proposed deal could merge two major players in the mining industry, it faces potential competition hurdles due to its scale. The announcement of the proposal saw copper prices surge above $10,000 per tonne for the first time in two years.

Analysts express concerns about potential supply disruptions and limited production growth if BHP’s bid succeeds, as copper is crucial for green initiatives. BHP suggested spinning off Anglo’s platinum and South African iron ore divisions, but Anglo criticized the proposal, stating that it places undue burden and uncertainty on its business.

Stuart Chambers, Chair of Anglo American, labeled BHP’s proposal as “opportunistic” and highlighted its lack of value recognition for Anglo’s prospects. He also criticized the proposed structure for creating substantial uncertainty and execution risks primarily for Anglo American and its stakeholders.

Following the news, Anglo American’s share price experienced a slight decline, remaining marginally above the price per share offered by BHP for the acquisition.

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