In a decisive move, Anglo American has rejected BHP Group’s last-ditch request for more time to discuss a $49 billion takeover offer, effectively ending BHP’s five-week pursuit of the mining giant.
Anglo had previously granted BHP a one-week extension until 1600 GMT on Wednesday to submit a binding offer, after rejecting a third takeover proposal that it dismissed as difficult to execute. However, Anglo has now rejected BHP’s request for further time, saying it is “highly complex” and unlikely to result in a successful outcome.
BHP’s shares closed flat on Wednesday, while Anglo’s shares were little changed, as the market digested the news.
The rejection comes after BHP outlined commitments to minimize regulatory risk in South Africa, including job security for employees and shouldering the costs of increased South African employee ownership. However, Anglo signaled that these commitments were not enough to allay its concerns.
“BHP continues to restate its belief that the risks of its complex structure are not material, yet has repeatedly and consistently stated both publicly and during the engagements that it is unwilling to amend its proposed structure to assume these risks,” Anglo said in its statement.
The failed takeover bid is a blow to BHP’s ambitions to strengthen its position in copper and other metals central to the world’s clean energy shift. Meanwhile, Anglo has outlined its own plan to divest less profitable assets and focus on expanding copper output.
Analysts suggest that if BHP walks away, it is unclear whether another suitor might emerge for Anglo, which is attractive for its prized copper assets in Chile and Peru. The rejection could effectively have killed the deal, with one person familiar with the situation describing it as “virtually impossible” for BHP to put in an offer by the Wednesday deadline.