BHP has launched a $38.8 billion bid to acquire Anglo American, a move that could redefine the global mining landscape and position BHP as the leading mining company worldwide.
If successful, the merger would create a powerhouse in copper, iron ore, and metallurgical coal, marking it as the largest deal in BHP’s history and one of the year’s biggest across all sectors. Additionally, it would strengthen BHP’s position in iron ore and metallurgical coal.
James Whiteside, Metals and Mining Corporate Research Director at Wood Mackenzie, described the potential deal as the most significant shakeup in the global mining industry in over a decade.
“But Anglo American shareholders may consider fair value closer to the share price in 2023 before operational issues emerged and other suitors may be compelled to act at this price.”
Sathiya Narayanan Jalapathy, Business Fundamentals Analyst at GlobalData, highlighted that the acquisition aligns with BHP’s strategy to expand its copper assets, offering substantial growth potential in the future.
The deal would also enhance BHP‘s presence in the diamond market.
The bid has piqued investor interest, evident in the 12.3 per cent surge in Anglo American’s stock value. Should the deal go through, it could create a mining giant valued at approximately $200 billion.
While Anglo American has faced challenges, especially in its platinum group metals (PGMs) and diamond segments, it has shown growth in copper sales and production.
The proposed acquisition could lead to a combined entity with a top line of over $84 billion, EBITDA exceeding $34 billion, and a workforce approaching 100,000, solidifying its position as a major player in the mining sector.
The potential merger between BHP and Anglo American, if completed, would reshape the mining sector, particularly in copper, and significantly impact the competitive landscape.