BHP ends pursuit of Anglo for now, FT reports

While the Anglo American acquisition may no longer be on the table for now, BHP’s focus on high-value opportunities remains steadfast, ensuring any future deals align with the company’s long-term growth objectives.

Sources from the Financial Times indicate that BHP’s pursuit of Anglo American has become “too expensive” due to the significant rise in Anglo American’s stock price over recent months.

Over the past year, Anglo American’s London-listed shares have surged nearly 40%, in contrast to a 16% decline in BHP’s stock value. At the time of BHP’s initial bid, Anglo’s shares were trading at approximately £21.00, but they have since climbed above £25.00, making the deal financially challenging for BHP.

Anglo American’s Strategic Restructuring Boosts Value

Anglo American’s rising valuation aligns with its ongoing efforts to restructure its mining business. The British mining giant has proposed divesting its coal, diamond, and platinum assets, a move that gained momentum after fending off BHP’s takeover attempt.

In November, Anglo American successfully sold its coal assets to Peabody (NYSE: BTU) in a $3.8 billion deal. The restructuring strategy has not only strengthened the company’s market position but also fueled investor confidence, further driving up its stock price.

BHP’s Disciplined Approach to Acquisitions

On the other side, BHP’s chairman, Ken MacKenzie, stated during the company’s annual meeting that BHP had “moved on” from the Anglo American deal, describing it as an opportunity that “made sense” at the time. However, he also clarified that this does not entirely rule out the possibility of another bid, provided it complies with UK regulations.

BHP’s CEO, Mike Henry, reinforced the company’s commitment to a disciplined approach when evaluating acquisitions, emphasizing that mergers and acquisitions are only one of several growth strategies for the mining giant.

Exploring New Opportunities

Since stepping back from the Anglo American deal, BHP has partnered with Canada’s Lundin Mining (TSX: LUN) on a joint $3 billion bid for copper exploration company Filo Corp (TSX: FIL). This move highlights BHP’s strategic pivot toward copper assets, aligning with the growing global demand for critical minerals in the transition to clean energy.

While the Anglo American acquisition may no longer be on the table for now, BHP’s focus on high-value opportunities remains steadfast, ensuring any future deals align with the company’s long-term growth objectives.