BHP Group, a mining powerhouse, has recently made an offer to acquire its competitor Anglo American for approximately $39 billion. This monumental deal represents one of the largest transactions in mining history.
Anglo American confirmed receipt of the all-share bid from BHP on Thursday and disclosed it was conditional on the disposal of shares in its two South Africa-based units, Anglo American Platinum and Kumba Iron Ore.
This proposed merger aims to consolidate two leading players in the mining industry at a time when copper demand has spiked for renewable energy and electric vehicle applications, signalling a global shift from fossil fuels.
Before the proposed separation from its platinum and iron ore sectors, Anglo American's production included roughly 30% copper. Conversely, BHP holds a majority stake in Escondida in Chile, the world's most significant copper mine.
Besides gaining access to 'future-oriented commodities' via Anglo American's top-tier copper resources, BHP revealed in its London stock exchange filings that the potential deal would also grant it exposure to Anglo American's iron ore operations in Brazil and metallurgical coal assets in Australia.
In this planned deal, Anglo American shareholders would be given 0.7097 BHP shares for each regular share in Anglo American, Anglo Platinum, and Kumba, valuing Anglo American at 31.1 billion pounds ($38.86 billion), said BHP.
BHP has until May 22 to either make a definitive offer or declare its intention to do so. BHP's shares traded in the New York market were found to be 2.5% lower at $57.77 around 11:35 a.m. ET.