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Equities

BHP Eyes $39B Anglo Bid, Aims for 10% Copper Market Share

BHP mulls over enhanced bid for Anglo American after $39 billion offer rejected, eyeing strategic copper assets.

By Max Weldon

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4/27, 11:19 EDT
BHP Group Limited
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Key Takeaway

  • BHP Group considers revising its $39 billion bid for Anglo American after initial rejection, signaling potential major mining sector consolidation.
  • An acquisition could give BHP 10% of global copper supply amid anticipated shortages, highlighting strategic resource interests.
  • Stakeholder responses vary, with Anglo American deeming the first offer "opportunistic" and undervalued, while BHP seeks shareholder support for a new proposal.

BHP's Revised Proposal

BHP Group is reportedly considering an improved offer for Anglo American PLC following the rejection of its initial $39 billion bid. Sources familiar with the matter indicate that the Australian mining giant is in discussions with its advisers about a revised proposal. The initial all-share deal proposed by BHP involved Anglo American spinning off its controlling stakes in South African platinum and iron ore companies before acquisition. BHP has not yet finalized the decision on the size and structure of the new proposal. Anglo American's Chairman, Stuart Chambers, labeled the initial offer as "opportunistic" and insufficient in valuing the company's future prospects.

Market Implications

A successful acquisition of Anglo American by BHP would significantly alter the global mining landscape, giving BHP approximately 10% of the global copper mine supply. This move comes at a time when a copper shortage is anticipated by market analysts, potentially leading to soaring prices. The transaction, if realized, would mark BHP's return to large-scale mergers and acquisitions, highlighting the strategic importance of copper and other resources in the company's portfolio.

Stakeholder Perspectives

The proposal has elicited varied responses from stakeholders. Anglo American's rejection of the initial offer points to a valuation mismatch and concerns over the strategic fit of the proposed deal. BHP, on the other hand, is engaging with its key shareholders to garner support for an improved offer, indicating the company's commitment to pursuing this acquisition. The market is closely watching these developments, with investors and analysts speculating on the potential impact on both companies' valuations and the broader mining sector.

Management Quotes

  • Stuart Chambers, Chairman of Anglo American:

    "The proposal [from BHP] is opportunistic and fails to value the company’s prospects."