BHP’S latest failed attempt to acquire Anglo American has prompted investors and analysts to question the world’s largest miner’s dealmaking approach as it seeks new growth opportunities, said the Financial Times on Tuesday.
The newspaper said mining executives and bankers were surprised BHP made a fresh takeover bid that would have created the world’s largest copper producer with combined market capitalisation of $170bn – only to then withdraw days later following rejection by Anglo’s board.
The approach and swift rebuff occurred just three weeks before Anglo shareholders are scheduled to vote on 9 December on a proposed merger with Canada’s Teck Resources. BHP approached Anglo on Thursday with a cash-and-shares offer valuing the company at between £30 and £35 per share, representing an 11% to 30% premium on the undisturbed price of £27, said the Financial Times.
News of the bid leaked via Bloomberg on Sunday, prompting Anglo’s board to inform BHP of its rejection later that day. BHP withdrew hours afterwards.
Key obstacles included not only price but also potential regulatory delays in China and uncertainty over future BHP share values. The Anglo-Teck combination presented a high threshold for any competing proposal, said the Financial Times citing people familiar with the matter.
Unlike BHP’s previous £39bn approach in April and May 2024, which featured complex structural requirements for Anglo to divest certain assets, this offer was simpler and more straightforward. Anglo has since undergone extensive restructuring, including spinning out its platinum operations.
Industry observers believe BHP could have secured Anglo 18 months earlier with a less complicated structure. BHP maintained the combination would have delivered “strong strategic merits” whilst expressing confidence in its organic growth strategy.
