The mining world is abuzz as BHP, the world’s largest mining company, is in a heavyweight corporate brawl with Anglo American. Both companies’ chief executives are set to speak at an annual Bank of America mining investment event in Miami, bringing in major investors and mining leaders. BHP is proposing a $44 billion takeover of Anglo American to create the world’s biggest mining champion, focusing on copper production.
The next critical event in the proposed merger is scheduled for next week, where British takeover law requires BHP to make a formal offer by May 22 or walk away. BHP’s initial proposal of $31.40 per share was later raised to $34.70, valuing Anglo American at close to $42.5 billion. Anglo American’s board has rejected both offers, calling them “highly unattractive,” and unveiled a restructuring plan focusing on core assets like copper, iron ore, and fertilizers.
Anglo American holds a historic significance in South Africa, where it is considered a national corporate champion and major employer with deep connections to diamond and gold mining. But with the shifting landscape of the mining industry, Anglo American has moved its headquarters to London and values copper mining in South America as its most valuable asset. BHP is interested in acquiring the copper assets but is hesitant about the South African platinum and iron ore sectors, which it wants Anglo American to sell before a merger.
Despite BHP’s attempts to secure a deal, investors and investment banks remain skeptical about the proposed merger. RBC Capital Markets believes BHP needs significant operational synergies to justify the offered price, while Liberum Capital doubts the feasibility of the proposal as structured. The South African competition commission has also warned that any formal offer will face a national interest test, adding another layer of complexity to the deal.
In Miami, BHP’s Mike Henry and Anglo American’s Duncan Wanblad are expected to face tough questions about the merger proposal. Henry may be pressed on whether the current share swap terms are final or will be further sweetened, while Wanblad will need to provide details on his strategic update and address concerns about cost overruns and project delays that prompted BHP’s merger proposal. The outcome of this high-stakes battle will have significant implications for the future of the mining industry and the global economy.
