Anglo American rejects BHP's offer

News
Following the announcement made by the Australian giant BHP regarding an offer to acquire a portion of Anglo American's global business, the British company's Board of Directors provided an update stating that “the unsolicited, non-binding, and highly conditional offer was unanimously rejected by the company.”

By Panorama Minero

The proposal consisted of an all-share offer for Anglo American by BHP, with the requirement that Anglo American complete two separate demergers of its stakes in Anglo American Platinum Limited and Kumba Iron Ore Limited. "Both the all-share offer and the required demergers would be inter-conditional," stated Anglo American, and the Board, after evaluating the proposal with its advisers, concluded that it "significantly undervalues Anglo American and its future prospects."

"Furthermore, the Board finds the structure proposed by BHP unattractive for shareholders due to the inherent uncertainty and complexity in the offer, as well as significant risks in its execution," they added.

Following the announcement, Stuart Chambers, chairman of the London-based company, commented, "Anglo American is well-positioned to create significant value from its portfolio of high-quality assets, which align with the energy transition and other major demand trends. With copper representing 30% of Anglo American's total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the Board believes that Anglo American shareholders will benefit from the expected significant increase in value as those trends take full effect."

"The BHP proposal does not reflect the prospects of Anglo American and significantly dilutes the relative value participation of Anglo American's shareholders compared to BHP's shareholders. The proposed structure is also highly unattractive, creating substantial uncertainty and execution risks that fall almost entirely on Anglo American, its shareholders, and other stakeholders. Anglo American has defined clear strategic priorities: operational excellence, solid portfolio and growth to maximize its value potential and is entirely focused on achieving that."

As a result of this announcement, a "offer period" has begun and BHP has until May 22 to declare its firm intention to make a concrete offer for Anglo American or to decline its position.

Anglo American is one of the largest global producers of copper, diamonds, and platinum, although the offer sent by the Australian giant did not intend to include its platinum or African iron operations in the deal. The operation aimed to acquire a portion of the diamond mining business Anglo owns in South Africa, its copper business, its nickel business, and its iron business in Brazil.

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