Glencore said to be considering a bid for Anglo American
Anglo has rejected a $39bn all-stock proposal from BHP, the world’s number one miner
03 May 2024 - 11:33
byClara Denina, Pratima Desai and Felix Njini
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Glencore's Mount Owen coal mine is pictured in Ravensworth, Australia. Glencore has approached Anglo American, sources say, which could spark a bidding war for the 107-year old mining company. Picture: LOREN ELLIOTT/REUTERS
Commodities group Glencore is studying an approach for Anglo American, two sources said, a development that could spark a bidding war for the 107-year old mining company.
Glencore has not yet approached Anglo, one of the sources said. The discussions are internal and preliminary at this stage and may not result in an approach, the source added.
“We do not comment on market rumour or speculation,” a Glencore spokesperson said.
On April 26, Anglo rejected a $39bn all-stock proposal from BHP, the world’s number one miner. BHP’s proposed premium was 31% above Anglo’s closing price on April 23.
A source familiar with the matter previously said that the Australian mining giant was considering making an improved offer. It has until May 22 to make a formal bid.
US shares of Anglo American rose after the news, closing up 6.5% on the session. Glencore’s US shares fell 1%.
Anglo is attractive to its competitors for its prized copper assets in Chile and Peru, a metal used in everything from electric vehicles and power grids to construction, whose demand is expected to rise as the world moves to cleaner energy and wider use of AI.
Anglo American and Glencore each own 44% of the Collahuasi mine in Chile, estimated to have some of the world’s largest reserves of copper.
At the same time, Anglo’s sprawling portfolio also includes platinum, iron ore, steelmaking coal, diamonds and a fertiliser project.
Anglo’s share price has jumped since the offer was made public.
Before that, the miner had underperformed its peers following production downgrades and writedowns that led to a strategic review of its assets in February.
Glencore is still in the middle of a $6.9bn acquisition of 77% of Canadian miner Teck’s coal unit, which it expects to close by the third quarter of 2024.
A precondition of BHP’s proposal was that Anglo sell its shares in Anglo Platinum (Amplats) and Kumba Iron Ore in SA. The world's largest listed company exited SA in 2015.
In a statement on May 2, BHP said that the proposal “reflects the priorities for its portfolio and opportunity for synergies.”
Glencore owns coal and chrome assets in SA.
“Unlike BHP, Glencore could benefit from keeping Kumba and marketing iron ore, and Glencore may face less political pushback in SA, especially if it were to propose a straightforward all-share deal that does not include Kumba and Amplats demergers,” Jefferies analyst Christopher LaFemina said in a research note on April 29, where he assessed different takeover scenarios for Anglo American.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Glencore said to be considering a bid for Anglo American
Anglo has rejected a $39bn all-stock proposal from BHP, the world’s number one miner
Commodities group Glencore is studying an approach for Anglo American, two sources said, a development that could spark a bidding war for the 107-year old mining company.
Glencore has not yet approached Anglo, one of the sources said. The discussions are internal and preliminary at this stage and may not result in an approach, the source added.
“We do not comment on market rumour or speculation,” a Glencore spokesperson said.
On April 26, Anglo rejected a $39bn all-stock proposal from BHP, the world’s number one miner. BHP’s proposed premium was 31% above Anglo’s closing price on April 23.
A source familiar with the matter previously said that the Australian mining giant was considering making an improved offer. It has until May 22 to make a formal bid.
US shares of Anglo American rose after the news, closing up 6.5% on the session. Glencore’s US shares fell 1%.
Anglo is attractive to its competitors for its prized copper assets in Chile and Peru, a metal used in everything from electric vehicles and power grids to construction, whose demand is expected to rise as the world moves to cleaner energy and wider use of AI.
Anglo American and Glencore each own 44% of the Collahuasi mine in Chile, estimated to have some of the world’s largest reserves of copper.
At the same time, Anglo’s sprawling portfolio also includes platinum, iron ore, steelmaking coal, diamonds and a fertiliser project.
Anglo’s share price has jumped since the offer was made public.
Before that, the miner had underperformed its peers following production downgrades and writedowns that led to a strategic review of its assets in February.
Glencore is still in the middle of a $6.9bn acquisition of 77% of Canadian miner Teck’s coal unit, which it expects to close by the third quarter of 2024.
HILARY JOFFE: A long game ahead for BHP and Anglo
A precondition of BHP’s proposal was that Anglo sell its shares in Anglo Platinum (Amplats) and Kumba Iron Ore in SA. The world's largest listed company exited SA in 2015.
In a statement on May 2, BHP said that the proposal “reflects the priorities for its portfolio and opportunity for synergies.”
Glencore owns coal and chrome assets in SA.
“Unlike BHP, Glencore could benefit from keeping Kumba and marketing iron ore, and Glencore may face less political pushback in SA, especially if it were to propose a straightforward all-share deal that does not include Kumba and Amplats demergers,” Jefferies analyst Christopher LaFemina said in a research note on April 29, where he assessed different takeover scenarios for Anglo American.
Reuters
BHP responds to critics as senior execs head to SA
MOFEREFERE LEKOROTSOANA: BHP’s bid for Anglo is a chance for an economic reset
PETER BRUCE: Only the fine print will delay Anglo’s inevitable demise
Anglo ‘may need to break up regardless of BHP offer’
Companies in this Story
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Sibanye drags Gwede Mantashe to court
Has BHP just lit the fuse on market M&A?
CLYDE RUSSELL: BHP’s Anglo deal will be hard to effect to the satisfaction of ...
EDITORIAL: Prodding the beast into action
Takeover rules stop Anglo from revealing BHP bid details at AGM
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.