BHP buyout proposal to Anglo could reshape copper market
London-listed miner Anglo American has received an all-share buyout proposal from BHP Group, a deal that would create the world’s biggest copper miner churning out around 10% of global output.
The deal, if agreed, would also trigger further transactions in the global mining industry, which has seen a slew of mergers and acquisitions as companies review their assets to raise exposure to metals deemed critical to the energy transition.
“This is all about copper,” said Ben Cleary, portfolio manager at Tribeca Investment Partners, which holds shares in BHP and Anglo.
“I think it’s a good deal for BHP. Anglo is obviously very much in play now and there’s probably room for others to interlope. This is going to set the whole sector on fire.”
The proposal comes after Anglo, which had a market capitalisation of $37.7bn as of Wednesday’s close, began a review of its assets in February after a 94% plunge in annual profit and a series of writedowns due to a fall in demand for most of the metals it mines.
Anglo owns mines in countries including Chile, SA, Brazil and Australia.
BHP, the world’s biggest listed miner and best-known for mining iron ore, copper, coking coal, potash and nickel, had a market capitalisation of about $149bn as of Wednesday.
Copper in focus
The deal, if agreed, would give BHP access to more copper, one of the most sought after metals for the clean energy transition, and potash, which are its key strategic commodities, as well as more coking coal in Australia.
Technological developments such as artificial intelligence and automation, and the energy transition, which includes electric vehicles and renewable energy, have driven up demand prospects for copper cable used to conduct electricity.
Anglo has copper mines in Chile and Peru, countries in which BHP also has operations.
Copper prices on the London Metal Exchange have surged 15% this year. BHP declined to comment.
If the Anglo American deal came to fruition, it would be the second major acquisition for BHP in about a year after its 2023 purchase of copper miner Oz Minerals and adds to a frenzy of global M&A activity.
Recent mega-deals in the mining sector include gold giant Newmont’s $16.8bn buyout of Australia-based Newcrest Mining late last year.
Once the deal is completed, it would likely be among the 10 biggest-ever mining deals by value and has the potential to delist Anglo from the London market, a fresh blow to an exchange that is struggling to retain big companies and to attract new share offerings.