Mining giant BHP (NYSE: BHP) is reportedly considering a bid for Anglo American (OTCQX: AAUKF), a deal that would rank as one of the year’s biggest M&A transactions.
Bloomberg reported on Wednesday that Anglo American (OTCQX: NGLOY) has confirmed receiving an unsolicited non-binding combination proposal from BHP. The proposal would involve an all-share offer for Anglo American by BHP, preceded by separate demergers of Anglo American’s entire shareholdings in Anglo American Platinum and Kumba Iron Ore to Anglo American shareholders.
Anglo American’s shares have declined by 12% over the past year, giving the company a market value of £27B (~$34B), while BHP’s market value stands at ~$149B. Anglo (OTCQX: AAUKF) (OTCQX: NGLOY) has faced challenges due to a slump in key commodities it produces, resulting in a sharp decline in profits and a dividend cut in 2023. The company recently wrote down the value of its De Beers diamond unit by $1.6B and reduced its copper production targets.
According to the report, deliberations are at an early stage, and there is no guarantee that BHP will proceed with the deal.
