BHP makes $38.8B bid for Anglo American

Mining and metals company BHP Group Ltd. has initiated a $38.8 billion business combination proposal to London-based competitor Anglo American PLC.

Anglo American says it received “an unsolicited, nonbinding and highly conditional” proposal from the Australia-based company. The proposal comprises an all-share offer for Anglo American subject to the pro rata distribution of its entire shareholdings in Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. to Anglo American shareholders.

This deal would increase BHP’s access to copper, which it refers to as a future-facing commodity essential to the energy transition, along with potash. According to Reuters, the deal would create the world’s largest copper miner with approximately 10 percent global output.

RELATED: Copper price continues its climb

“The combination would bring together the strengths of BHP and Anglo American in an optimal structure,” BHP said in a press release. “Anglo American would bring its assets and long-term growth potential. BHP would bring its higher margin cash generative assets and growth projects along with its larger free cash flows and stronger balance sheet.”

The proposal values Anglo American at $31.39 per share, Anglo Platinum at $6.08 per share and Kumba at $4.26 per share.

The deal would also give BHP more access to iron ore and metallurgical coal through Anglo American’s operations in Brazil and Queensland, Australia, respectively.

Anglo American says its board is currently reviewing the proposal with its advisers.

BHP previously strengthened its copper portfolio through the acquisition of Adelaide, Australia-based OZ Minerals Ltd. in May 2023.