Mining giant BHP Group on Thursday said it had made an all-share takeover offer for rival Anglo American, valuing the company at £31.1 billion ($38.9 billion).
Mining giant BHP Group on Thursday said it had made an all-share takeover offer for rival Anglo American, valuing the company at £31.1 billion .The proposal would entail divestments by Anglo American to its shareholders of its stakes in South Africa-based Anglo American Platinum Limited and Kumba Iron Ore Limited.Anglo American shares were 13% higher at 10:05 a.m. in London.
BHP said the combination would optimize Anglo American's "assets and long-term growth potential" with its own "higher margin cash generative assets and growth projects along with its larger free cash flows and stronger balance sheet."A combination of the firms would form a juggernaut in copper mining and the world's largest player in the space which would supply 10% of global output, according to a Reuters analysis.
Dan Coatsworth, investment analyst at AJ Bell, said the mining sector was now "reverting to old habits and chasing mega-mergers." BHP may look to demerge the business due to recent difficulties in diamonds from lower luxury goods demand and competition from lab-grown diamonds, Coatsworth flagged.
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