British multinational miner Anglo American announced on Thursday that it had received an unsolicited, non-binding, and highly conditional combination proposal from BHP Group, a global mining giant. The proposal is an all-stock buyout, and the terms of any potential offer are subject to change. Anglo American’s board is currently reviewing the proposal.
Both Anglo American and BHP have recently identified potash as an important business that would complement their mining operations as food demand grows. BHP is currently focusing on its Jansen potash project in the Canadian province of Saskatchewan, while Anglo American has its hopes on the Woodsmith potash mine in Yorkshire.
A deal would be preceded by separate demergers by Anglo American of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore to Anglo American shareholders. BHP declined to comment when asked about earlier reports about preliminary talks with Anglo American.
The global mining sector has seen a recent slew of merger and acquisition activity despite rising concerns around the economic outlook of one of the world’s largest metals buyers, China. More broadly, M&A activity has registered an uptick in the first few months of this year, including mega deals.
