BHP and Anglo American Officially End Merger Talks

BHP (ASX:BHP,NYSE:BHP,LSE:BHP) confirmed in a Monday (November 24) statement that its merger discussions with Anglo American (LSE:AAL,OTCQX:NGLOY) have officially ended.

The discussions trace back to April 2024, when BHP made its first offer to Anglo to combine their copper assets.

Copper has become a prime focus for various major mining companies as they seek scale and efficiency in the face of tightening supply and the costly hunt for new deposits.

BHP’s 2024 pursuit yielded a total of three offers, the last of which Anglo rejected in May of that year.

At the time, Anglo said that the deal did not meet its expectations.

That rejection didn’t entirely dissuade BHP, which according to Bloomberg made a new advance on Anglo last week.

The news outlet describes the move as a ‘last-minute proposal’ that would have prevented Anglo’s planned merger with Canada’s Teck Resources (TSX:TECK.A,TECK.B,NYSE:TECK). The combined Anglo-Teck entity is projected to become the second largest listed copper-focused producer after BHP.

In its statement, BHP said it is now abandoning its Anglo bid for good:

“Whilst BHP continues to believe that a combination with Anglo American would have had strong strategic merits and created significant value for all stakeholders, BHP is confident in the highly compelling potential of its own organic growth strategy.’

According to media reports, BHP saw a deal with Anglo as a means to keep its dominance in copper.

“While it remains the world’s top producer, its lead is narrowing in the years ahead without significant new projects,” Reuters notes. The news outlet quotes Berenberg analysts, who believe the Anglo-Teck merger now looks more solid.

“A BHP bid for Anglo would have frustrated that deal, but with BHP now stepping away, it appears that the interloper risk for Anglo has materially reduced and the Anglo/Teck Resources deal is likely to go ahead, assuming approvals are received,’ the firm wrote. The deal is still awaiting approval under the Investment Canada Act.

Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.