- BHP’s proposed acquisition would be the largest mining industry deal in history
- Anglo American has expressed concern about the complexity of the acquisition.
BHP is asking Anglo American to agree to extend the deadline for the Australian miner to consolidate its proposed takeover bid for its FTSE 100 mining rival.
The Australian natural resources giant had until 5pm today to make another formal offer for its rival or abandon the deal, which, if successful, would be the largest mining industry deal in history.
Last week, Anglo American agreed to start talks with BHP despite rejecting the group’s £39bn takeover bid after rejecting two smaller bids.
Takeover battle: BHP asks Anglo American to extend takeover deadline
BHP told investors on Wednesday it has offered a “number of socio-economic measures” to try to address Anglo American’s anxieties over the latest bid.
London-based Anglo has previously expressed concerns about the complexity of the deal and the demand to sell its South African platinum and iron ore divisions.
BHP said it could pay an “appropriate reverse breakup fee” if it fails to obtain the required antitrust and regulatory approvals in South Africa.
It said these measures would “provide substantial risk protection for Anglo American shareholders and complement the significant increase in value that Anglo American shareholders will receive from the potential combination.”
BHP added: ‘A further extension of the deadline is required to allow for greater commitment to its proposal.
“This announcement does not amount to a firm intention to make an offer and there can be no certainty that an offer will be made.”
Anglo has rejected two previous approaches worth £31bn and £34bn, saying they were too low and “very unattractive”.
It has revealed a separate plan to divest or spin off a significant portion of its operations.
If the acquisition goes through, the expanded business would be responsible for producing around 10 percent of the world’s copper, a crucial element in the green transition due to its use in technologies such as solar panels and electric vehicles.
Anglo American operates three of the top ten producing copper mines in South America, while BHP operates the world’s largest copper mine, Escondida, in the Atacama Desert.
Reports suggest the merged company could move its listing from Australia to London, which would represent a major win for the beleaguered UK markets.
In recent years, several companies have left London or moved their primary listing to another city in the hope of achieving a higher valuation.
BHP was removed from the FTSE 100 in January 2022 after deciding to end its dual listing structure and base its primary listing in Sydney.
Since then, building materials supplier CRH, plumbing specialist Ferguson and mining company AngloAshanti Gold have all moved their primary listings to Wall Street.
Anglo-American stocks were 1.25 per cent lower at £25.26 on Wednesday morning, while BHP Group Shares they rose 1.8 per cent to £23.76.