Australian mining giant BHP says it is no longer considering a merger with rival Anglo American after confirming it had again discussed a tie-up more than a year after its first failed attempt.
The global resources company headquartered in Melbourne confirmed on Monday that it held talks with Anglo over recent days, overtures that Bloomberg reported on Sunday, citing sources familiar with the matter.
For BHP and CEO Mike Henry, the move will represent a test of how far the company is willing to go in its efforts to grow in copper.Credit: Bloomberg
BHP said in a statement that it “continues to believe that a combination with Anglo American would have had strong strategic merits and created significant value for all stakeholders”.
“Following preliminary discussions with the board of Anglo American plc, BHP Group Ltd confirms that it is no longer considering a combination of the two companies.”
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The miner said, while it was confident of its own “highly compelling potential” for organic growth, it nonetheless reserves the right to set aside its current position if Anglo’s board agrees to do the same, another bidder makes an offer for Anglo, or if the UK’s panel on Takeovers and Mergers indicates there is a “material change of circumstances.”
John Mills, equity analyst with Morningstar, said the lack of financial detail on BHP’s latest disclosure of talks with Anglo makes it difficult to determine why Anglo’s board had rejected its approach.
“There would have been some sort of figure involved, whether it was shares or cash, or a combination thereof, otherwise it would have been harder for Anglo to just to fob them off,” he said.
BHP, which has a $205 billion market capitalisation, is one of the world’s largest producers of copper, accounting for about 1.9 million tonnes of the sought-after green metal annually.
