BHP Group Ltd (NYSE:BHP), the world’s largest mining company, has initiated a bid to acquire rival Anglo American Plc (OTC:AAUKF) (OTC:NGLOY), potentially triggering significant upheaval in the industry after years of dormancy.
Anglo American, valued at £27 billion ($34 billion), disclosed that it had received an unsolicited merger proposal in the form of a stock exchange offer.
The proposed merger is contingent on Anglo divesting its South African platinum and iron ore units.
If successful, this deal would signify a resurgence in large-scale transactions for BHP, which, under CEO Mike Henry, has rekindled its appetite for transformative acquisitions in recent years, according to a report from Bloomberg.
The report further noted that a merger with Anglo would establish the world’s leading copper producer, positioning itself to meet the surging demand from emerging energy sectors, while potentially attracting other competitors seeking to bolster their output.
Anglo American, long identified as an attractive target among major mining firms, possesses substantial copper operations in South America, a coveted asset in an industry focused on augmenting reserves and production.
Nevertheless, its intricate corporate structure and diverse commodity portfolio, coupled with significant exposure to South Africa, have deterred suitors, as per the report.
BHP produced approximately 1.2 million tons of copper in 2023, while Anglo yielded 826,000 tons, positioning the combined entity to command around 10% of global mine supply.
However, regulatory hurdles loom as governments view copper as a strategic resource, the report mentioned.
Anglo American stated that its board is evaluating the proposal, with no assurance of a forthcoming offer.
BHP stock gained over 3% in the last 12 months. Investors can gain exposure to the stock via Pacer Trendpilot International ETF (NYSE:PTIN) and Avantis International Equity ETF (NYSE:AVDE).
Also Read: BHP To Slash Australian Workforce As Nickel Market Downturn Continues
Price Action: BHP shares are trading lower by 3.12% at $57.39 in premarket at the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!