30 May 2024 , 07:54
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BHP has confirmed it's not going ahead with a bid for rival Anglo American bringing a close to what would have been a huge merger between two giants of the mining sector.
Australian company BHP, announced that it couldn't come to terms with its competitor over certain issues. Talks of a nearly £39billion deal have been ongoing since Wednesday May 22, as both companies tried to hammer out the details of a possible takeover.
BHP was up against a 5pm deadline on Wednesday to either put forward a concrete offer or abandon the acquisition discussions. "While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American," declared Mike Henry, BHP's chief executive.
Mr Henry was referring to BHP’s requirement, in its takeover approaches, for its rival to spin off its South African operations, resulting in heavy criticism from the government in Pretoria. Anglo American also opposed this.
Henry added: "We remain of the view that our proposal was the most effective structure to deliver value for Anglo American shareholders, and we are confident that, working together with Anglo American, we could have obtained all required regulatory approvals, including in South Africa."
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In response to BHP abandoning the possible bid, Anglo American’s chairman Stuart Chambers said: “Anglo American has set out a clear pathway to accelerate delivery of its strategy and to unlock significant value for its shareholders. Our shareholders will benefit from value transparency and undiluted exposure to a simpler portfolio of world-class assets, consistently stronger operational performance, and highly attractive growth in copper, premium iron ore and crop nutrients.”
The FTSE 100-listed company is “fully focused” on achieving its plans to boost value “at pace”, he added. The potential merger between BHP and Anglo American would have created the world's largest copper miner, controlling 10% of the global supply. Copper, a crucial component for green technologies like solar panels and electric vehicles, is at the heart of Anglo American's appeal, with its substantial copper reserves drawing keen interest.
However, earlier this month, Anglo American made headlines with its decision to restructure significant parts of the company and dramatically scale back the development of its £7billion North Yorkshire fertiliser project.