BHP makes takeover approach for Anglo American

The world’s largest mining company, BHP Group, has made a takeover approach for rival Anglo American Plc, a move that could spark the biggest shakeup in the industry in over a decade.

“If BHP does indeed continue to pursue this deal, we would be surprised if other bidders do not emerge,” analysts from Jefferies LLC led by Christopher Lafemina said in an emailed note. A bid that values Anglo at $42.6 billion — a 28% premium based on its latest share price — might get a deal “across the finish line,” they said.

Anglo has faced a series of major setbacks over the past year as prices for some of its key products plunged, while operational difficulties have forced the company to slash its production targets — driving down its valuation and leaving the company vulnerable to potential bidders.It said in its statement that its board was reviewing the proposal and there was no certainty an offer would be made.

“We would need to see the price BHP had in mind in order to form a better view,” Adrian Prendergast, senior analyst at Morgans Financial. said in an emailed note. A takeover of Anglo would be “material but not transformative” for BHP given the size of the target, he said. ADVERTISEMENT CONTINUE READING BELOW BHP last year bought copper producer OZ Minerals for about $6.4 billion in its first major purchase in years, but has otherwise focused until now on selling assets such as oil, gas and coal.

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