Mining Giant BHP Ends Pursuit of Anglo American
Australian mining behemoth BHP has formally abandoned its latest attempt to acquire rival Anglo American, walking away after the London-listed miner rebuffed its preliminary approach. This marks the second failed takeover attempt by BHP in just over a year, following its abandoned £39 billion bid in 2023.
Failed Overture Amid Impending Merger Vote
The decision comes at a critical juncture, with Anglo American and Canadian mining business Teck Resources preparing for a shareholder vote on their proposed $53 billion (£39 billion) merger on 9 December. BHP confirmed on Monday that it had held early-stage discussions with Anglo but would no longer pursue a combination.
In a statement to investors, BHP expressed continued belief that a merger would have offered strong strategic merits and significant value for all stakeholders. However, the company stated it would now focus exclusively on its own highly compelling organic growth strategy.
Copper Reserves Drive Mining Sector Interest
The intense interest in Anglo American is largely driven by its vast copper reserves, which represent a crucial component for low-carbon technologies including solar farms and electric vehicles. This strategic value made Anglo an attractive target despite BHP's three failed merger attempts last year.
Under City takeover rules, BHP is now blocked from making another bid for Anglo for six months, unless a significant change in circumstances occurs. This regulatory barrier effectively removes BHP from the acquisition landscape as Anglo progresses toward its merger with Teck.
The market has responded strongly to the ongoing consolidation activity, with Anglo's shares rising by more than two-thirds since the start of 2024 and showing nearly a 25% increase since BHP's initial offer in May last year.
Regulatory Hurdles and Sector Implications
The impending Anglo-Teck merger still requires approval from regulators in multiple countries, including China, the United States and Canada. Industry analysts suggest this deal could trigger further consolidation activity across the mining sector.
Kathleen Brooks of brokerage XTB noted that the merger strategy appears designed, at least in part, to rebuff other takeover attempts. She observed that the continued interest in major acquisitions within the resources sector indicates underlying confidence in the global economic outlook.
BHP's previous £39 billion bid faced fierce opposition from Anglo's board, which criticized the proposal as highly complex and unattractive, particularly due to conditions requiring the sale of Anglo's South African business interests. The Australian miner had declared it had moved on from the acquisition in October last year, making its recent renewed interest particularly noteworthy.
