BHP gets ready for a big deal
BHP’s shareholders have overwhelmingly backed the miner’s decision to unify its Australian and UK businesses and take its main stock listing to Sydney, which will mean it drops out of the FTSE 100 index, says Neil Hume in the Financial Times. The move is the latest in a series of changes since Mike Henry became chief executive in 2020, which also included selling its oil and gas business to Woodside Petroleum. BHP argues that this “simpler corporate structure” will make it “better able to seize on acquisition opportunities”.
“After sitting dormant for more than a decade”, it seems BHP “is positioning itself for a return to large-scale M&A”, say Thomas Biesheuvel and Dinesh Nair on Bloomberg. Sources say it is looking at rivals such as Freeport-McMoRan and Glencore, in line with the “growing recognition that deals will be essential to replace fossil fuel assets with mines that can produce the materials needed to decarbonise, such as copper and nickel”.
If BHP is looking for a “transformational deal” it could “scarcely have picked a worse time” to be “getting out its chequebook” says David Fickling, also on Bloomberg. After all, “Freeport’s market capitalisation is at a record, while Glencore shares are around their highest level in a decade”. And both have major assets in places “where corruption, weak governance and authoritarianism make it hard to keep your hands clean”. (Indonesia for Freeport, the Democratic Republic of Congo and Kazakhstan for Glencore). A deal could undermine the decades BHP has spent “trying to burnish its credentials as a responsible miner”.