Anglo American and BHP Group are locked in a takeover battle, with Anglo American rejecting BHP's latest request to extend the deadline for discussions. The two mining giants have been engaged in talks since late May, with Anglo American previously rejecting BHP's proposals due to concerns over valuation and demands to de-merge from two South African entities. BHP had proposed socioeconomic measures including investment in a mining research and development facility, local employment guarantees, and charitable contributions. However, these efforts have not been enough to sway Anglo American's board.
Anglo American's rejection of the extension request sets up a dramatic climax to the five-week battle between two of mining's biggest names. The deadline for discussions is fast approaching, and it remains unclear whether BHP will make a firm offer without the support of Anglo American's board or walk away for six months.
The takeover talks come as part of an effort by BHP to create a copper mining juggernaut and capitalize on the base metal's critical role in the green energy transition. Anglo American, on the other hand, has recently announced plans to spin off its De Beers diamond unit and its steelmaking coal, nickel, and platinum businesses as part of a sweeping restructuring of its 107-year-old business.
The pressure is on Anglo American to accept an offer. However, the company's CEO has expressed concerns over the execution risk associated with the deal and the demands for it to de-merge from two South African entities. It remains unclear whether BHP's socioeconomic provisions will be enough to address these concerns.
The takeover offensive paves the way for a return of mega-deals in the mining industry after more than a decade of quiet. Copper's recent rally has also heightened demand in the space, with BHP rival Rio Tinto similarly expanding its business in the base metal.
