Posted on 16 May 2024
Anglo American outlined a group restructuring that includes plans to spin off its platinum-metals and diamonds units after it announced to turn down a new GBP 34 billion ($42.59 billion) takeover bid from its industry peer BHP one day before, the esteemed global mining entity announced on May 13 local time.
The miner will demerge its platinum-metals subsidiary Anglo American Platinum, divest or demerge its diamond unit De Beers, and divest steelmaking coal assets, while exploring options for nickel operation before divesting it. Copper, iron ore and crop nutrients will remain key in Anglo American's portfolio, it said.
"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction," said its Chief Executive Duncan Wanblad.
Anglo American had rejected BHP's initial all-share proposal for GBP 31.1 billion earlier on April 25, as it deemed the proposal opportunistic, expressing concerns that it would diminish shareholder value compared to BHP's interests, as reported.
The new offer, tabled on May 7, represented a 10% increase over the initial bid or a 15% boost in the merger exchange ratio. This adjustment aimed to elevate Anglo American shareholders' collective ownership in the merged entity to 16.6%, up from the initial 14.8%.
In the revised higher bid, BHP reiterated its request for Anglo American to divest its platinum and iron ore divisions, a proposition Anglo American Chairman Stuart Chambers considered "highly unattractive" due to its inherent uncertainty, complexity, and substantial execution risks.
"The latest proposal from BHP again fails to recognize the value inherent in Anglo American," Chambers emphasized.
Source:Mysteel Global
