Mining Giant BHP Forced to Walk Away From Anglo American Takeover
Australian mining behemoth BHP has officially terminated its pursuit of FTSE 100-listed rival Anglo American, marking the collapse of its latest takeover attempt. The decision comes after Anglo American's board rebuffed BHP's preliminary approach, maintaining its commitment to a planned $53 billion (£39 billion) merger with Canadian mining company Teck Resources.
Failed Overture and Regulatory Constraints
BHP confirmed on Monday that it had held early-stage discussions with Anglo American but would no longer be pursuing a combination. The Australian company stated it was "no longer considering a combination of the two companies" and would instead concentrate on its organic growth strategy. Under UK City takeover regulations, this failure means BHP is now barred from making another bid for Anglo American for six months, barring a significant change in circumstances.
This represents the second major failed attempt by BHP to acquire its London-listed rival. Last year, BHP made three unsuccessful approaches before publicly declaring it had "moved on" in October. The previous £39bn bid was dismissed by Anglo's board as "highly complex and unattractive," partly due to conditions requiring the sale of its substantial South African business interests.
Copper Reserves Drive Strategic Interest
The intense interest in Anglo American is largely driven by its vast copper reserves, which are critically important for the global transition to low-carbon technologies. Copper is an essential component for electric vehicles, solar farms, and other green infrastructure, making Anglo's assets highly strategic.
Market response to the prolonged takeover speculation has been markedly positive for Anglo American shareholders. The company's London-listed shares have surged by more than two-thirds since the start of 2024 and have gained almost a quarter since BHP's initial offer in May last year.
Sector Consolidation and Future Implications
The impending Anglo-American and Teck Resources merger, scheduled for a shareholder vote on 9 December, still requires regulatory approval across multiple jurisdictions including China, the United States, and Canada. Market analysts anticipate this consolidation will trigger further deal-making activity within the global mining sector.
Kathleen Brooks, an analyst at brokerage XTB, suggested the merger strategy serves as a defensive measure against future takeover attempts. "If there was deep concern about the global economy, or the potential for a deep stock market crash, then it would be unlikely to see any takeover attempts, rebuffed or not, in the resources sector," she noted, indicating continued confidence in the sector's fundamentals.
Despite acknowledging the strategic merits of a combination with Anglo American, BHP expressed confidence in its standalone growth potential, telling investors it believes in the "highly compelling potential of its own organic growth strategy."
