BHP makes proposal to buy Anglo American for US$39 billion

Australian BHP, one of the largest mining companies in the world, presented a formal proposal to purchase competitor Anglo American. The offer made was US$38.8 billion, the equivalent of R$200 billion at the current exchange rate. Negotiations are still in the initial phase.

If it prospers, the deal will result in a global mining giant that would open a comfortable front against the Brazilian Vale and the Australian Rio Tinto. The company resulting from the merger would become the leader in copper production, having 10% of the world’s mine supply.

The proposal was presented above Anglo American’s current market value of US$35 billion. BHP said it will offer Anglo American shareholders 25.08 pounds ($31.39) per share, a 31% premium, and split the group’s iron ore and other mineral assets.

The offer excited investors. Anglo American shares jumped almost 14% on the London Stock Exchange this Thursday morning (April 25, 2024), in light of the possible purchase by BHP. The company informed that its Board of Directors is evaluating the proposal, but that “not sure” about the acquisition offer.

The possible purchase is part of BHP’s strategy to advance operations in the Americas, especially in the production of minerals for the energy transition, such as copper and nickel.

Anglo American was founded in South Africa and is headquartered in England. It also has strong penetration in America. In Brazil, it operates 2 copper mines. It also has an iron ore operation, in which Vale recently joined as a minority partner.

BHP is a partner of Vale in Samarco, a company that extracts iron ore in Mariana (MG), where a dam broke in 2015. The repair agreement is still under negotiation between the Brazilian government, the Renova foundation (controlled by Vale and BHP) and the States of Minas Gerais and Espírito Santo.