In a dramatic turn of events, Anglo American has rejected BHP’s plea to extend takeover talks, citing concerns over the “highly complex and unattractive structure” of the proposed deal. The Australian miner had until 5pm UK time to make an offer for the company or walk away from a potential £39bn deal that would have reshaped the mining industry.
The two mining giants have been in discussions since May 22, with BHP making three approaches that all required Anglo to spin off its two South African businesses. This demand angered the government in Pretoria and was strongly opposed by Anglo.
Despite BHP’s request for an extension to further engage on its proposal, Anglo stood firm, stating that the Australian company had not addressed their “fundamental concerns” regarding the deal structure. The board concluded that there was no basis for a further extension.
BHP, looking to acquire Anglo to bolster its copper operations, expressed confidence in its takeover plan, stating that the risks were “quantifiable and manageable” and that the costs had already been factored into the offer.
As talks reached an impasse, with the deal structure being the main point of contention, BHP sought advice from Michael Katz, chair of Africa’s largest law firm ENS, to navigate issues such as tax, regulation, and social impact.
BHP’s proposal included commitments to maintain Anglo’s Johannesburg office, list BHP shares in South Africa, and share in the cost of increased South African employee ownership. The company also expressed willingness to discuss a break fee in case the deal was blocked by regulators.
The future of the potential deal remains uncertain as the deadline passes, leaving both companies at a crossroads in the high-stakes world of mining acquisitions.