BHP ends $75 billion takeover bid for Anglo American after prolonged negotiations

BHP Group (ASX: BHP) has confirmed it has shut down its takeover of Anglo American after a further rebuff of its $75 billion bid.

The Australian mining giant decided it had had enough of Anglo’s stalling tactics, the last straw being the African miner’s failure to secure an extension to a deadline to commit to a binding offer.

The decision to end the six-week long pursuit came a day after BHP had revealed it had proposed a range of socioeconomic measures aimed at addressing Anglo American’s concerns over the proposed transaction structure.

Increased final offer

BHP submitted an increased and final offer to the board of Anglo American on 20 May 2024 as part of its revised proposal for a potential combination with Anglo to be undertaken by way of a scheme of arrangement.

The revised offer followed BHP’s proposals previously submitted on 16 April and 7 May and was rejected by the Anglo board on 22 May.

“BHP is disappointed that the board of Anglo American has decided not to continue discussions to resolve its concerns regarding the implementation of BHP’s revised proposal,” chief executive officer Mike Henry said.

“BHP had been engaging with Anglo American on these topics since the submission of its revised proposal on 20 May and believes that there was a viable pathway available to resolve Anglo American’s concerns.”

“In particular, Anglo American’s assertion that value risk under our proposal would be exclusively for the account of Anglo American shareholders is not accurate.”

“BHP is confident that the measures it has proposed to the board of Anglo American provide a viable pathway to resolve the matters raised by Anglo American and would support South African regulatory approvals,” the company said in an ASX announcement a day prior to deciding it had had enough.

“BHP believes that these proposed measures would provide greater economic benefits to South Africa than Anglo American’s accelerating value delivery plan, mitigate perceived value and completion uncertainty and ensure that any costs are not borne disproportionately by Anglo American shareholders.”

Disciplined approach

In announcing the decision to end the takeover plan, Mr Henry said the company will not be making another firm offer for Anglo American.

“BHP is committed to its capital allocation framework and maintains a disciplined approach to mergers and acquisitions,” he said.

“While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the pie of value for both sets of shareholders, we were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost.”

“Despite seeking to engage constructively and numerous requests, we were not able to access from Anglo American key information required to formulate measures to address the excess risk they perceive.”

“We remain of the view that our proposal was the most effective structure to deliver value for Anglo American shareholders and we are confident that, working together with Anglo American, we could have obtained all required regulatory approvals, including in South Africa.”