BHP Abandons Its Bid for Anglo

BHP has its eye on Anglo’s copper assets like the Quellaveco mine in Peru.
(Photo: Anglo American)
After submitting three revised offers, BHP gave up buying Anglo American on May 29, 2024. “BHP will not be making a firm offer on Anglo American,” BHP CEO Mike Henry said in a statement, in which the company said it was disappointed that Anglo’s board decided not to continue talks.

Anglo rejected BHP’s request for extra time to prepare a new $50 billion takeover bid. The company said BHP failed to respond to the board’s concerns about the risk associated with the structure of the bid, which included plans to spin off Kumba Iron Ore and Anglo American Platinum. Both of which operate in South Africa.

“Despite our efforts to engage constructively and our numerous requests, Anglo American did not provide the key information needed to improve the offer,” Henry said.

The Anglo takeover would have further strengthened BHP’s position as the leading copper producer. While BHP continued to increase the number of its shares that Anglo shareholders would receive with each revised proposal, the structure of the deal remained same. BHP wanted Anglo to spin off Anglo American Platinum (Amplats) and Kumba Iron Ore. Anglo shareholders would have received shares in Amplats and Kumba had BHP’s proposal been accepted.

Aside from undervaluing the company, the Anglo board said BHP’s proposal contemplated a structure which the board believes is highly unattractive for Anglo shareholders, given the inherent uncertainty and complexity, and significant execution risks.

Following the rejection of the second revised $43 billion proposal, Anglo announced plans to break up its business and focus on copper and crop nutrients. The company said it would spin off Amplats, divest De Beers (diamonds), and sell its metallurgical coal segments. It also said it’s exploring selling or suspending nickel operations.

As featured in Womp 2024 Vol 06 -