Anglo American Plc has rejected a $39 billion takeover proposal from BHP Group because it “significantly undervalues” the company and its future prospects, Bloomberg reported on April 26.
“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 chairman Stuart Chambers said in a statement.
BHP had proposed a £31 billion takeover of Anglo American that would bring together two global mining companies and rank as one of the industry’s largest transactions in years.
The world’s largest mining group on April 25 said that it had offered 0.7097 BHP shares for each Anglo share, as it sought to expand its portfolio of copper mines, a mineral for the decarbonisation of the global economy.
Anglo shareholders would also receive shares in two South African units that would be spun off, according to the proposal.
BHP said its offer valued each Anglo share at £25.08. Anglo shares rose 13 per cent to £24.89 in early trading in London, giving the company a market capitalisation of £30.5 billion.
The deal would have elevated BHP to rank as the world’s largest copper producer, up from the third largest currently, according to RBC. The combined group would generate more than 2mn tonnes of copper per year, about 10 per cent of global mined supply.
Demand for copper is expected to soar because of a global transition away from fossil fuels. The metal is heavily used in renewable energy projects and electric vehicles.
