Anglo American rejects BHP’s $38.8B bid

London-based Anglo American has rejected Australia-based BHP Group Ltd.’s $38.8 billion business combination proposal.

The proposal comprised an all-share offer for Anglo American by BHP, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. to Anglo American shareholders.

The deal would have increased BHP’s access to copper, which it refers to as a future-facing commodity.

“Anglo American is well-positioned to create significant value from its portfolio of high-quality assets that are well-aligned with the energy transition and other major demand trends,” Anglo American Chairman Stuart Chambers says. “With copper representing 30 percent of Anglo American’s total production, and with the benefit of well-sequenced and value-accretive growth options in copper and other structurally attractive products, the board believes that Anglo American’s shareholders stand to benefit from what we expect to be significant value appreciation as the full impact of those trends materializes.”

Anglo American says the proposal “significantly undervalues” the company and its prospects.

“The BHP proposal is opportunistic and fails to value Anglo American’s prospects, while significantly diluting the relative value upside participation of Anglo American’s shareholders relative to BHP’s shareholders,” Chambers says. “The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders. Anglo American has defined clear strategic priorities of operational excellence, portfolio and growth to deliver full value potential and is entirely focused on that delivery.”