BHP Group (BHP.AX) has made a $38.8 billion bid for Anglo American (AAL.L), in a move to create the world’s biggest copper miner and capitalize on the growing demand for the metal in the global energy transition.
BHP’s offer of 25.08 pounds ($31.39) per Anglo share represents a 31% premium over Anglo’s closing price on Wednesday. The deal would see BHP spin out Anglo’s iron ore and platinum assets in South Africa, where BHP has no existing operations.
The proposed acquisition is the latest in a flurry of mining mergers and acquisitions as companies aim to boost their exposure to critical metals like copper. Copper prices have extended gains on the news, with the metal trading up 1% to $9,873 per metric ton on the London Metal Exchange by the early afternoon.
A combined BHP-Anglo entity would account for around 10% of global copper output, potentially triggering further consolidation in the industry. Anglo, which has a market value of $37.7 billion, operates mines in countries including Chile, South Africa, Brazil and Australia.
However, the proposed deal has faced some pushback from Anglo shareholders. Legal & General Investment Management (LGIM) described the bid as “highly opportunistic” and “unattractive,” while Redwheel said the details were “rather sketchy” and that the offer could spur further interest in Anglo.
BHP, the world’s largest listed miner, is best known for its iron ore, copper, coking coal, potash and nickel operations. The acquisition would follow its 2023 purchase of copper miner Oz Minerals, as the company seeks to expand its footprint in the critical metals space.
A takeover of Anglo would likely be one of the 10 biggest mining deals by value and could lead to the company’s delisting from the London market, potentially dealing a blow to an exchange that has struggled to retain large companies and attract new public listings.
Some analysts believe BHP may need to offer a higher premium to succeed in its pursuit of Anglo, with one advisory firm stating there was “almost no way” the current offer would be enough to entice Anglo’s management to accept the deal.