BHP eyes Anglo American for copper growth

Following the news in April that BHP made an all-share offer for Anglo American which valued the company at US$40.7 billion, BHP has made a revised offer to acquire Anglo American in a deal valued at US$42.7 billion on 7th May.  

However, Anglo American has rejected the revised offer, claiming it undervalues their company and that the proposed structure places execution risk on Anglo American shareholders. 

This news comes following Anglo American suffering a confluence of lower prices, disruptions to its South African operations and technical issues in 2023. Most will roll on to hit earnings in 2024 and its market valuation has suffered relative to peers with an iron ore focus. BHP identified this as a transformative opportunity bolster its copper portfolio with Tier 1 assets. But it’s Anglo American's decade-long strategic focus that has secured these world class assets, making the company a prime target. 

The acquisition would give BHP a leading position in copper, but the bid value relies on accelerated development of brownfield copper and unlocking portfolio value through divestments. BHP has a fixed deadline of May 22nd to make a formal offer. 

BHP has now dispatched a delegation to South Africa to win over government officials. The key question is whether BHP will gain enough confidence to execute its "buy and spin" strategy and further raise its offer. Alternatively, will Anglo American act first by securing competitive capital? 

Fill out the form at the top of the page to download our full report, ‘BHP eyes Anglo American for copper growth’, which explores all of these issues in more detail, and analyses the potential combination of BHP and Anglo American – including valuation, strategic rationale and synergies. All these factors will be crucial in determining whether this ambitious merger becomes a reality, potentially reshaping the landscape of the global mining sector. 

Here are three key points from the full article: 

• BHP believes acquiring Anglo American will unlock cost savings and allow them to leverage their expertise for quicker copper growth. 
• BHP will use all the time available to formulate a final formal bid before 22nd May. 
• Whether successful or not, this deal will lead to a major portfolio reshuffling for Anglo American. 

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To download our full article, ‘BHP eyes Anglo American for copper growth’, fill out the form at the top of the page.