Potential Bidding War Emerges For Anglo American As Glencore Considers Offer

Zinger Key Points
  • Glencore considers an offer for Anglo American, setting the stage for a potential bidding war.
  • Anglo American's copper assets attract significant interest as demand rises due to the global green transition.

Anglo American NGLOY could be at the center of a bidding war with commodities giant Glencore GLCNF after it rejected BHP‘s BHP $39-billion offer.

What Happened: According to sources cited by Reuters, discussions within Glencore are internal and preliminary at this stage.

With Glencore potentially entering the race and BHP contemplating an improved offer, Anglo American finds itself in a prime position to benefit from a potential bidding war.

BHP dispatched its executive team, including CEO Mike Henry, to South Africa to discuss its proposal. The company’s revised approach focuses on divesting Anglo’s South African assets in platinum and iron ore before a full takeover, which concerned local officials and shareholders.

See Also: Will Copper Enter a Structural Deficit?

Why It Matters: Anglo American owns extensive copper assets in Chile and Peru — key players in the global copper market. Copper is a critical metal for clean energy technologies and is experiencing heightened demand due to the green transition.

Furthermore, Glencore already co-owns the Collahuasi mine in Chile with Anglo American, which holds some of the world’s largest copper reserves.

However, the company is finalizing a separate $6.9-billion acquisition of Teck's coal assets, adding a layer of complexity to its potential involvement.

The political and regulatory landscape in South Africa is complex, especially with upcoming national elections and heightened scrutiny on corporate restructuring.

Commenting on the matter, Hudbay Minerals HBM CEO Peter Kukielski pointed at the growing valuation of copper assets as an argument for a stronger premium.

“The deal has increased the valuation of copper assets and underscores major mining companies’ belief that copper prices will be significantly higher in the future,” Kukielski said for Reuters. Hudbay was among the few Canadian miners engaged in domestic acquisition last year, buying Copper Mountain in a $439 million all-share transaction.

What’s Next: BHP has a May 22 deadline to submit a new formal bid.

Benzinga Mining is the bridge between mining companies and retail investors. Reach out to licensing@benzinga.com to get started!

Now Read: Peter Schiff Highlights Pandemic Darling Stock’s 98.5% Decline To Make A Point About Mispriced Gold Mining Stocks: ‘Same Situation Exists Today’

Image: Flickr

Market News and Data brought to you by Benzinga APIs
Posted In: M&ACommoditiesTop StoriesCopperminingStories That Matter
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!