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BHP asks for more time to explore Anglo American takeover

BHP has already had two offers for Anglo American rejected
BHP has already had two offers for Anglo American rejected - Copyright AFP/File Ben STANSALL, William WEST
BHP has already had two offers for Anglo American rejected - Copyright AFP/File Ben STANSALL, William WEST
Steven TRASK

Mining behemoth BHP on Wednesday sought a deadline extension in its takeover pursuit of Anglo American, outlining a suite of measures to soothe shareholder concerns that have derailed previous offers. 

A core part of BHP’s plan is splitting off Anglo’s platinum holdings in South Africa, a politically sensitive move that has stirred government opposition ahead of the country’s general election Wednesday. 

South Africa’s state investment vehicle wields significant influence over the deal as one of the largest shareholders in Anglo American.

With a May 29 deadline looming, BHP — which is listed in London and Sydney — on Wednesday made a last-ditch attempt to mollify these concerns and keep its bid alive.

“BHP believes that its proposal will contribute to South Africa and allow the benefits of South African mining to be shared with more South African stakeholders,” the company said in a statement to the Australian stock exchange. 

“BHP believes a further extension of the deadline is required to allow for further engagement on its proposal,” it added.

This included a commitment to maintain staffing levels at Anglo’s Johannesburg office for “at least three years”, continuing Anglo’s charitable commitments in the country and building a centre of excellence to support South African mining. 

UK-based Anglo American has already knocked back two takeover attempts by the company nicknamed the “Big Australian”, which earlier this month upped its proposal to US$43 billion. 

Under UK takeover rules, BHP has until May 29 to stitch together a deal, request an extension or walk away. 

Any deal between two of the world’s largest resources companies would fundamentally reshape the sector, with far-reaching consequences for commodities markets and the global energy transition.

BHP’s interest is largely stoked by its hunger to secure a reliable copper supply. 

Anglo American’s South American copper holdings include four of the largest copper mines in the world. 

An electrical conductor used in wiring, the metal is seen as a bedrock of emerging clean-energy industries — a crucial component in the manufacture of solar panels, electric vehicles and rechargeable batteries.

Copper prices have increased about 400 percent in the past quarter of a century, and broke US$10,000 a tonne in April for the first time in two years.

The boom has already prompted a wave of investment, with BHP snapping up Australian copper producer OZ Minerals for more than US$6 billion last year.

Anglo American did not immediately reply to an AFP request for comment but has said previous BHP bids significantly undervalued the company. 

AFP
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