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BHP has made a new approach for rival Anglo American in a move that would create the world’s largest copper producer and disrupt Anglo’s planned $57bn combination with Teck Resources.
The renewed interest in Anglo came in recent days, according to people familiar with the approach, a year and a half after BHP walked away from a £39bn offer following fierce opposition from Anglo’s board.
BHP’s move comes as shareholders of Anglo and Teck prepare to vote on their combination on December 9.
The approach puts Anglo’s board, led by chair Stuart Chambers, in the difficult position of weighing a possible future under BHP against its planned deal with Teck, which has already won support from key shareholders.
BHP’s offer is understood to be partly in cash and partly in its shares, according to people familiar. Its share price has declined 20 per cent in the past two years, partly because of lower iron ore prices.
The nil-premium, all-share combination of Anglo and Teck has been endorsed by both boards, which say big synergies will be unlocked by merging operations at their neighbouring copper mines in Chile.
However, the Canadian government, which has the ability to block the transaction, has been more circumspect, with officials saying they want to see more proof that the deal will benefit Canada.
Shares in London-listed Anglo, a producer of copper and iron ore, have soared 67 per cent since the beginning of 2024 and are up by 24 per cent since BHP walked away from its earlier offer in May 2024.
The company has been undergoing a radical restructuring under which it has spun out its coal, nickel and platinum divisions, and will soon divest its diamonds business.
The opportunity to snap up Anglo’s extensive copper assets was a key driver for the previous approach by BHP, which wants to diversify its portfolio towards high-growth commodities such as copper and potash.
The 2024 bid, which included conditions requiring Anglo to sell off its South African assets, was widely criticised for being convoluted and tone-deaf, and sparked political opposition in South Africa.
Making a renewed approach 18 months later, when Anglo’s share price has risen in the interim, would underscore just how determined BHP is expand its copper portfolio, analysts say.
Unlike Anglo and Teck, which operate adjacent mines, BHP does not have immediate operating synergies with Anglo American on a large scale.
Any bid for Anglo would need to be at a healthy premium to its current £27 share price to successfully disrupt the combination with Teck, according to advisers.
Under the terms of the Anglo-Teck deal, either side is allowed to entertain offers from third parties but would have to pay a $330mn break fee if accepting a competing offer.
A fresh approach from BHP could also trigger other big mining deals, analysts say, as the mining majors jockey to gain the best position in copper, a metal crucial for the energy transition.
Market speculation has been building about whether London-listed Rio Tinto, whose new chief executive Simon Trott took up his post in August, could also enter the fray as an interloper in the Anglo-Teck deal.
BHP’s renewed approach was first reported by Bloomberg. Anglo and BHP declined to comment.
