Mining giant BHP Group (BHP) has offered to buy competitor Anglo American for over $39 billion in one of the industry’s most significant transactions in years.
In a deal that could restructure global mining, Anglo American announced Thursday that it has received an all-share offer from BHP, contingent on spinning off shareholdings in two South African-listed units, Anglo American Platinum and Kumba Iron Ore.
The agreement would bring together two of the industry’s major miners at a time when copper demand for renewable energy projects and electric vehicles is skyrocketing as the globe transitions away from fossil fuels.
Copper is said to account for approximately 30% of Anglo American’s output prior to the sale of the platinum and iron ore units suggested by BHP, while BHP owns a majority ownership in Chile’s Escondida, the world’s largest copper mine.
Aside from gaining “future-facing commodities through Anglo American’s world-class copper assets,” BHP stated in its statement to the London Stock Exchange that the transaction will expose it to Anglo American’s iron ore operations in Brazil and metallurgical coal assets in Australia.
According to BHP, Anglo-American stockholders will receive 0.7097 BHP shares for each ordinary share of Anglo-America, as well as ordinary shares of Anglo Platinum and Kumba. The transaction values Anglo-American at 31.1 billion pounds ($38.86 billion).
The mining conglomerate has until May 22 to either make a firm offer or announce its intention to make an offer.
Around 11:35 a.m. ET, BHP shares in New York fell 2.5% to $57.77.