(London) Australian mining giant BHP wants to buy its British rival Anglo American for $38.8 billion, which would represent one of the sector’s biggest mergers in years and create the world’s largest copper producer.
BHP, whose market valuation is around $148 billion, is offering 25.08 pounds per Anglo American share, which would give the target company a market valuation of 30.5 billion pounds ($38.8 billion).
Anglo American, which had announced earlier in the day that it was the subject of an “unsolicited” takeover proposal from BHP, saw its shares soar by more than 13% on the London Stock Exchange to 2,499 pence. – below BHP’s offer price.
BHP fell 2.54% to 2,304 pence around 5 a.m. (Eastern time).
This marriage, if it materializes, “would create the largest listed mining and copper producer in the world,” notes Neil Wilson, analyst at Finalto.
“Let’s not be afraid to say it: it’s monstrous,” he adds.
“The board of directors is currently reviewing this proposal” for a share buyout, Anglo American said in a statement, adding that “there is no certainty that an offer will be made, nor as to the conditions under which such an offer will be made. offer could be made.
“Pending further announcements, Anglo American shareholders should not take any action,” according to the British giant for this offer which must be made before the May 22 deadline.
Long-term trend
BHP’s proposal would involve a sale by Anglo American of its platinum and iron ore operations in South Africa.
The Anglo-Australian giant, one of the world’s largest mining companies, recently experienced a drop in profit following falling global nickel prices and compensation payments following a 2015 mining disaster. in Brazil.
Anglo American announced earlier this year its intention to cut thousands of jobs in its platinum business in South Africa.
Neil Wilson notes that Thursday’s surge in the stock of Anglo American, which has not had a very good year so far, “erases its stock market losses of the last twelve months.”
“BHP clearly wants to get its hands on the copper assets,” continues Mr. Wilson, who believes that the competition authorities would not fail to notice this “given the position on the copper market that the two combined companies would hold” – approximately 10% of world production.
The properties of copper, in particular its high conductivity and its ductility (the fact of being able to be deformed without breaking) make it a key metal for the energy transition, allowing numerous industrial uses such as the composition of vehicle batteries. electrical.
“The platinum and iron ore assets in South Africa would be offloaded, which would be politically sensitive,” remarks Mr. Wilson while adding that if BHP fails, “others will try again” because “the mega trend of bottom line is that long-term demand for metals will increase,” concludes the analyst.
Acquiring Anglo American would also give BHP greater access to potash and coking coal in Australia.
If it materializes, it would also mark a new blow for the London stock exchange, which would lose yet another value of its flagship FTSE 100 index.
The weakness of the pound against the dollar and the undervaluation of companies on the London Stock Exchange compared to Wall Street, for example, make companies listed in London increasingly frequent targets for acquisition operations.