Anglo American has rejected a £31.1 billion takeover offer from Australian mining rival BHP, which would have created the world’s largest copper producer. The company’s board announced Friday that BHP’s proposal “significantly undervalues” Anglo American and does not align with its future growth prospects.
Anglo American’s board indicated that the proposed structure was “highly unattractive” for its shareholders, citing uncertainties, complexities, and significant execution risks involved in BHP’s plan. The rejection was unanimous.
“Anglo American is well-positioned to create significant value from its portfolio of high-quality assets, which are well-aligned with the energy transition and other major demand trends,” said chairman Stuart Chambers. “With copper representing 30% of Anglo American’s total production and a range of well-sequenced growth options, we believe our shareholders stand to benefit from significant value appreciation as the full impact of those trends is realized.”
News of BHP’s unsolicited bid sent Anglo American shares surging by approximately 16% on Thursday. The deal would have valued each Anglo American share at £25.08, including stakes in the company’s subsidiaries, Anglo Platinum and Kumba Iron Ore. The bid was contingent on Anglo American demerging its entire shareholdings in these two businesses to its shareholders.
If BHP pursues a higher offer or takes the deal to shareholders, it could lead to the formation of the world’s largest copper producer. Together, the two companies produce around 10% of global copper output, a metal crucial for the shift from fossil fuels to electrical energy.
“The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders compared to BHP’s,” Chambers stated. “The proposed structure creates substantial uncertainty and execution risk, borne almost entirely by Anglo American and its stakeholders.”
Chambers emphasized that Anglo American has clear strategic priorities and is focused on delivering operational excellence and growth. The company remains committed to realizing its full potential for its shareholders, Chambers concluded.
