Australian mining giant BHP Group on Thursday made a nearly $40 billion offer to acquire its U.K.-based rival Anglo American, a deal that could create the world’s largest copper mining company if the deal goes through.
File Photo: Anglo American said it has received BHP's offer and it is being reviewed by its board of ... [+]
The BHP Group’s proposal is an all-share offer that values Anglo American at around $38.9 billion (£31.1 billion) Bloomberg reported.
BHP told Bloomberg the per-share value of the offer is around $31.36 (£25.08), roughly a 14% premium over Anglo American’s closing price on Wednesday.
Anglo American said its board is currently reviewing the offer.
The British firm added the offer includes a condition requiring it to spin off two of its South African units—Anglo American Platinum and Kumba Iron Ore.
Anglo American’s London-listed shares surged nearly 13% to $31.2 (£24.8) after the offer was reported while BHP’s U.K.-listed shares slumped by 3.51%.
If the proposed deal goes through, the merged entity would account for around 10% of the global copper output, making it the world’s biggest copper mining firm, according to Reuters. This is likely a key driving force behind BHP’s offer as copper prices have surged more than 17% since the start of the year and it could rise further, driven by a surge in demand for the metal. Copper is a key material used in the manufacturing of electric vehicles and renewable energy devices like wind turbines, and its demand is expected to rise sharply amid a push for cleaner energy.
Thursday’s offer is BHP’s second major acquisition in the past year after it acquired Australian mining firm OZ Minerals in a $6.27 billion (A$9.6 billion) deal last year. Copper was also a key driving factor for that acquisition.
$149.68 billion (A$229.39 billion). That is BHP Group’s current market cap, making it the world’s most valuable mining firm.
BHP Targets Anglo American in Bid Valuing Miner at $39 Billion (Bloomberg)