Mining behemoth BHP suggests purchasing Anglo American

Mining behemoth BHP suggests purchasing Anglo American

Competition BHP has made contact with UK-based mining behemoth Anglo American on a possible £31 billion acquisition.

Anglo American's board of directors is now reviewing the idea, the company informed the BBC.

"Anglo American's world class copper assets" would be available to BHP, according to the plan, which the company verified.

This would be one of the largest mergers in the mining business in a long time if the transaction closes.

The stock market value of Anglo American, which runs mines in Chile, South Africa, Brazil, and Australia, is around £29 billion.

With a market price of over A$229 billion (£119.5 billion), Australian-based BHP is the biggest publicly traded mining corporation in the world.

A year has passed since BHP paid A$9.6 billion to acquire copper miner Oz Minerals.

With Anglo American's activities in South America, the merger, if finalized, would provide BHP more access to copper.

This year, the price of copper has increased by about 15% on the world market.

The metal's strong demand as the transition to sustainable energy intensifies has resulted in price increases.

According to Tim Waterer, chief market analyst at financial services company KCM Trade, "Anglo American's current footprint in the copper industry is ultimately what lured a mining giant such as BHP."

According to Mr. Waterer, Anglo American's stock price decline of over 10% over the last year may have increased its appeal as a takeover target.

The buyout bid for BHP, according to Susannah Streeter of financial platform Hargreaves Lansdown, "will send a fresh chill through the City of London". The London Stock Exchange lists Anglo American as a listed company. BHP moved its main listing to Sydney in 2022 from its previous listings in both the UK and Australia.

"There are concerns that if this agreement goes through it could be the tip of the iceberg and even more giants could leave the exchange."

Early on Thursday, the price of Anglo American's shares increased by almost 12% to £24.86.

Any bid under BHP's plan is contingent upon Anglo American relinquishing its interest in South African assets that produce iron and platinum ore.

The merger and acquisition regulations in the UK give BHP till the end of business on May 22 to submit a formal bid for Anglo American.