Anglo American’s strategic shift towards becoming a copper-focused mining company could significantly influence its future, particularly in light of BHP Group’s previous $49 billion takeover bid that was rebuffed earlier this year. Key points include:
BHP’s Previous Bid: BHP attempted to acquire Anglo in May but withdrew after being rejected three times. With the six-month block on another bid expiring at the end of November, speculation about a renewed approach is rising.
Strategic Shift: Anglo has been convincing investors of its value growth plan, which involves divesting underperforming assets in platinum, diamonds, and coal to concentrate on copper—a critical metal for energy transition.
Investor Sentiment: If Anglo successfully transforms into a copper-centric entity, it could bolster its market value and deter BHP from pursuing another acquisition. However, delays in this transformation might entice investors to reconsider a bid.
Current Operations: Despite its ambitions, Anglo reported a 13% decline in copper output for the third quarter, although it remains on track to meet its annual production guidance of 730,000 to 790,000 tons.
Asset Sales and Spin-offs: CEO Duncan Wanblad is actively selling coking coal mines and nickel assets, along with contemplating a spin-off of its De Beers diamond unit. This restructuring is aimed at enhancing Anglo’s appeal to investors and potential acquirers.
Market Reactions: Anglo’s shares saw a rise following BHP’s initial bid but have since lost some of that premium. Analysts suggest that a restructured Anglo could be more attractive to BHP, potentially leading to a renewed bid post-restructuring.
Timing Considerations: Analysts believe BHP may wait until mid-2025, when Anglo’s asset separation is expected to be completed, to make any new offer. However, there are concerns that delaying too long could result in a higher valuation for Anglo or unfavorable market conditions for BHP.