Anglo American PLC NGLOY has rebuffed a takeover offer from BHP Group Ltd. BHPLF and remains committed to a proposed merger with Teck Resources Ltd. TECK-B-T two weeks before a critical shareholder vote.
Melbourne-based BHP, the world’s largest mining company, made a preliminary takeover offer to London-based Anglo last week after making an unsuccessful US$39-billion pitch for the company in 2024, according to two sources familiar with the process.
The Globe and Mail agreed not to name the sources because they are not permitted to speak for the companies. Bloomberg first reported on the transaction on Sunday.
Late Sunday afternoon, prior to the opening of trading on the Australian stock exchange on Monday local time, BHP said in a press release that after preliminary discussions with the Anglo board of directors, “it is no longer considering a combination of the two companies.”
“Whilst BHP continues to believe a that a combination with Anglo American would have had strong strategic merits and created significant value for all shareholders, BHP is confident in the highly compelling potential of its own organic growth strategy,” said BHP general counsel Stefanie Wilkinson in the release.
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BHP made its latest move ahead of a scheduled Dec. 9 vote by shareholders of both Anglo and Vancouver-based Teck on a merger of the two companies. Analysts predict the merger will be approved.
The takeover drama reflects the increasing competition between global mining companies for control of massive copper mines that will produce what BHP chief executive officer Mike Henry calls a “future facing mineral” critical to a lower-emission economy.
BHP, Anglo and Teck are all major copper producers, with massive operations in the same region of Chile. Anglo and Teck estimate they can save US$1.4-billion annually by combining the operations of their two largest mines in the country, which are 15 kilometres apart.
Mr. Henry, who is from Vancouver, has focused on building BHP’s copper business during his five years as CEO, while exiting sectors such as oil and gas. Last year, BHP partnered with Vancouver-based Lundin Mining Corp. to acquire developer Filo Corp. for US$3.25-billion. Filo owned copper properties near the border of Argentina and Chile.
In September, Anglo and Teck surprised the mining community by announcing a merger of equals, with no takeover premium, that would create the world’s fifth-largest copper miner.
BHP owns the Jansen mine, making it a key player in the Canadian industry.
The new company will be renamed Anglo Teck, and will be worth about US$57-billion. Anglo shareholders will end up owning 62.4 per cent of the company and Teck shareholders will own 37.6 per cent.
BHP has a US$132-billion market capitalization. The company is a significant player in Canada’s mining industry as owner of the Jansen potash mine in Saskatchewan. The first stage of that project is expected to open in mid-2027, at a cost of US$7.4-billion.
Last year, Anglo successfully rebuffed BHP by claiming its takeover offer, which involved spinning out Anglo divisions, undervalued the British company. Since then, Anglo exited platinum mining and announced plans to sell its legacy coal and diamond business, De Beers.
A BHP takeover of Anglo would have created a dominant copper producer and been heavily scrutinized by competition regulators around the world, including in China and Europe. When BHP first proposed the transaction last year, analysts said the companies would need to sell a number of copper mines to win regulatory approval.
If Anglo and Teck shareholders do approve the merger in December, the marriage will require federal government approval.
Last year, former Industry Minister François-Philippe Champagne linked control of critical mineral production to Canada’s national security. He said the government would only sign off on foreign acquisitions of important domestic producers of copper and other strategic metals “in the most exceptional of circumstances.”
To win government approval, Teck and Anglo plan to have their head office in Vancouver and make Canada a critical minerals powerhouse. The two companies have also committed to spend at least $4.5-billion on projects in Canada over the next five years.
Since the merger was unveiled in September, current Industry Minister Mélanie Joly has consistently said pledges from Teck and Anglo don’t go far enough to win the government’s blessing.
B.C. Premier David Eby and proxy advisory firm Glass, Lewis & Co. have endorsed Teck’s merger with Anglo. If the federal government does sign off, the transaction is expected to close by the end of 2026.
In 2023, Swiss miner Glencore PLC made an offer for Teck that the Canadian company successfully rebuffed, with backing from three federal ministers. Teck subsequently sold its steel-making coal operations in southern B.C. to Glencore for US$8.9-billion, with government approval.