An image of an Anglo American sign in Brisbane.

The Board of Anglo American has rejected a revised takeover proposal from BHP, which offered shareholders 15 per cent more than the initial offer.

BHP made the revised proposal on 7 May 2024, after its initial bid was declined by Anglo American in April 2024. 

Anglo American said that the structure of the latest proposal is unchanged, comprising an all-share offer for Anglo American by BHP, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore to Anglo American shareholders. The all-share offer and required demergers would be inter-conditional.

Under the terms of the the second proposal, for each Anglo American share owned, shareholders would receive:

  • 0.8132 BHP shares
  • Ordinary shares in each of Anglo American Platinum and of Kumba Iron Ore (distributed by Anglo American to its shareholders in direct proportion to Anglo American shareholders’ effective interest in Anglo American Platinum Limited and Kumba Iron Ore Limited).

Upon consideration with its advisers, the Anglo American Board concluded that the proposal continues to undervalue Anglo American and its future prospects.

The company said that the Board also took into account the detailed feedback from its engagement with Anglo American shareholders and stakeholders since the approach from BHP became public in April 2024.

Anglo American said that the latest proposal continues to contemplate a structure that the Board believes is highly unattractive for Anglo American’s shareholders, given the uncertainty and complexity inherent and execution risks.

The company said that the requirement to pursue two contemporaneous demergers creates significant uncertainty, which falls disproportionately to Anglo American shareholders.

The Anglo American Platinum and Kumba Iron Ore shareholdings, at current market value, are worth approximately $15 billion and 34 per cent of the proposed total consideration. Anglo American said that this is a substantial amount of stock to distribute and reflects a majority of the shares of both Anglo American Platinum and Kumba Iron Ore, which creates significant uncertainty as to the delivered value as part of the proposal.

Anglo American said that requiring this as part of a takeover of Anglo American would result in additional approvals related to the two demergers and the timetable to obtain the additional approvals is expected to be lengthy.

The company said that some of the approvals may result in potential conditions being attached, which could disproportionately impact Anglo American Platinum and Kumba Iron Ore and are not addressed in the BHP’s latest proposal.

Anglo American said that the Board is confident in Anglo American’s standalone future prospects. The company has accelerated plans for delivery of its standalone strategy and said it will provide a detailed investor update in May 2024.

Chairman of Anglo American, Stuart Chambers, said, “The latest proposal from BHP again fails to recognise the value inherent in Anglo American. 

“Anglo American shareholders are well positioned to benefit from increasing demand from future enabling products while the increasing capital intensity to bring greenfield supply online makes proven assets with world class resource endowments ever more attractive. The Anglo American team is focused on delivering against its strategic priorities of operational excellence, portfolio simplification and growth and is set to accelerate delivery in order to unlock this inherent value.

The BHP proposal also continues to have a highly unattractive structure. This leaves Anglo American, its shareholders and stakeholders disproportionately at risk from the substantial uncertainty and execution risk created by the proposed inter-conditional execution of two demergers and a takeover.”

BHP’s Chief Executive Officer, Mike Henry, said that BHP is disappointed that this second proposal has been rejected.

Mr Henry said that the revised proposal represents a 15 per cent increase in the merger exchange ratio and increases Anglo American shareholders’ aggregate ownership in the combined group to 16.6 per cent from 14.8 per cent in BHP’s first proposal.

“BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses.

“The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets.”

Mr Henry said that the combined business would also have the balance sheet strength, capital discipline and operational capability to execute the attractive pipeline of growth options in BHP and Anglo American’s portfolios.

“In putting forward a revised proposal, we have been guided by our capital allocation framework and our view of the fundamental value of Anglo American and BHP.

“The combination is consistent with BHP’s strategy and the revised proposal is underpinned by a focus on delivering long term fundamental value.”

Image credit: Marlon Trottmann/


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