BHP Group, the world's largest mining company, has proposed to buy rival Anglo American in a potentially industry-shaking deal at a time when demand for copper is soaring.
BHP said on Thursday it had approached Anglo with a bid worth 31.1 billion pounds (about $39 billion). This is one of the most important deals in the industry in years. If successful, the acquisition would create the world's largest copper mine at a time when global demand for copper, essential for the transition to green energy, is on the rise.
Anglo confirmed that it had received “an unsolicited, non-binding and highly conditional merger proposal from BHP” and that its board was considering the proposal with its advisers. BHP, headquartered in Melbourne, Australia, offered Anglo shareholders just over £25 per share.
London-based Anglo owns large copper operations in Chile and Peru, as well as an 85 percent stake in De Beers Group, one of the world's largest diamond companies. The company is seen as a potential takeover target for the world's biggest miners, especially after a 94% plunge in annual profits in February and a series of writedowns.
But the structure is complex, a fact reflected in the complexity of BHP's bid, which requires Anglo to first separate South Africa's platinum and iron ore sectors.
Analysts said BHP's offer could prompt other companies to make competing bids for Anglo. One reason for this is that the proposed transaction would likely be subject to antitrust scrutiny. They recommended that Anglo separate its diamond business, which has recently suffered from a decline in demand for luxury goods in China and the United States.
“Anglo has said BHP needs to make its intentions clear by May 22nd, and if it formally formalizes a serious bid,” Ben Davies, an analyst at Liberum, said in a note. , there is a good chance that we will invite other participants.”
Copper prices on the London Metal Exchange have risen 15% this year, approaching $10,000 a tonne, as the rise of clean energy technologies such as wind turbines, electric car batteries and heat pumps boosts demand.
In the United States, President Biden's signature climate and energy law, the Control Inflation Act, includes hundreds of billions of dollars in tax credits to help companies switch to lower-carbon energy sources, while Europe It is pursuing a similar strategy in its deals.
If Anglo's acquisition is successful, it would create the world's largest copper mining company.
“Overall, we find that trading in copper assets makes sense,” Berenberg analysts said in a research note. “However, BHP may be purchasing a group of assets that require some degree of caution and caution, and in our view there is limited upside room at this time.”
