BHP Offer Values Anglo American at $39 Billion
We’ve talked quite a bit about why this
deal is happening and why now.
We spoke to Sony Lounge over at MGM
earlier on and she was saying this isn’t
because it’s London, it’s not because
it’s cheap.
This is because of energy transition.
And the copper access is not the driving
force here.
I think that’s right.
Everyone would like to get their hands
on more copper and BHP among the
companies that would like to do this if
they got this deal.
But it is a complicated deal with many
hurdles, but if they got it done, they
would control about 10% of the global
copper supply and be the biggest,
biggest supplier.
And that position very well for a world
in which the expectation is the
electrification of everything, all those
wires and cables that we’re going to
need, all those electric cars means that
copper demand is going to keep rising at
a time when supply is likely to remain
constrained.
Well, you say it’s complicated.
I think you’re being polite.
There is a significant South African
problem that is built into this.
Amplats is one part of it.
The unions in South Africa are another
part of it.
The pension funds, another part of it,
the government’s another part of it.
This is a complicated deal.
Is that why the premium is maybe as low
as it is?
Yes.
I mean, I think that people have always
seen that Anglo’s copper assets are an
attractive target.
But the reason that it never happened is
because of the complicated structure of
Anglo and the rather hodgepodge nature
of its assets.
You mentioned South Africa.
That’s the big one.
And it’s important to note that BHP have
made an investment in an iron ore
business as a condition of this deal
proceeding.
Now the biggest shareholder is the
Public Investment Corporation of South
Africa, a state investment firm.
They will be very protective of South
Africa’s interests in any deal.
And another complicating factor is the
beers over diamond business, which is
probably not key for BHP, but is also
partly controlled by the state of
Botswana.
So there are lots of hurdles.
The final one I would mention is
anti-trust.
Now China has in the past intervened in
mining deals.
They buy half of all its copper.
So a very interested in the map of the
global copper industry and they will
probably think that this would give BHP
too much control.
So there is some kind of an angle, but
there’s also an anti-trust angle that we
need to be aware of here as well.
Okay.
So a couple of reasons why this could be
complicated.
Well, what about other pages?
Do those factors just put off others?
Would it make more sense for others to
take on this asset, given that BHP often
seems to be conditional on selling lots
of things?
Well, I think the other bidders will
have the same problems with Anglo
American that BHP have, But there’s no
doubt that Anglo American, the copper
business centered on some world class
assets in Chile would also be of
interest to Rio Tinto and perhaps even
Glencore, where Glencore has its own
deal going on with its bid for some of
its assets.
Now
again that would be difficult, but once
Anglo is in play, I think it is going to
set off a bit of a frenzy within the
industry about how it ultimately shakes
out and what the shape of the industry
is going to be from here.
BHP is proposing to take over Anglo American in a deal that values the smaller miner at £31.1 billion ($38.8 billion). The takeover would catapult the combined company’s copper production far beyond its rivals while sparking the biggest shakeup in the industry in over a decade. Bloomberg’s Will Kennedy reports.
——–
More on Bloomberg Television and Markets
Like this video? Subscribe and turn on notifications so you don’t miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9
Visit http://www.bloomberg.com for business news & analysis, up-to-the-minute market data, features, profiles and more.
Connect with Bloomberg Television on:
X: https://twitter.com/BloombergTV
Facebook: https://www.facebook.com/BloombergTelevision
Instagram: https://www.instagram.com/bloombergtv/
Connect with Bloomberg Business on:
X: https://twitter.com/business
Facebook: https://www.facebook.com/bloombergbusiness
Instagram: https://www.instagram.com/bloombergbusiness/
TikTok: https://www.tiktok.com/@bloombergbusiness?lang=en
Reddit: https://www.reddit.com/r/bloomberg/
LinkedIn: https://www.linkedin.com/company/bloomberg-news/
More from Bloomberg:
Bloomberg Radio: https://twitter.com/BloombergRadio
Bloomberg Surveillance: https://twitter.com/bsurveillance
Bloomberg Politics: https://twitter.com/bpolitics
Bloomberg Originals: https://twitter.com/bbgoriginals
Watch more on YouTube:
Bloomberg Technology: https://www.youtube.com/@BloombergTechnology
Bloomberg Originals: https://www.youtube.com/@business
Bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake
Bloomberg Espanol: https://www.youtube.com/@bloomberg_espanol
Bloomberg Podcasts: https://www.youtube.com/@BloombergPodcasts
——–
More on Bloomberg Television and Markets
Like this video? Subscribe and turn on notifications so you don’t miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9
Visit http://www.bloomberg.com for business news & analysis, up-to-the-minute market data, features, profiles and more.
Connect with Bloomberg Television on:
X: https://twitter.com/BloombergTV
Facebook: https://www.facebook.com/BloombergTelevision
Instagram: https://www.instagram.com/bloombergtv/
Connect with Bloomberg Business on:
X: https://twitter.com/business
Facebook: https://www.facebook.com/bloombergbusiness
Instagram: https://www.instagram.com/bloombergbusiness/
TikTok: https://www.tiktok.com/@bloombergbusiness?lang=en
Reddit: https://www.reddit.com/r/bloomberg/
LinkedIn: https://www.linkedin.com/company/bloomberg-news/
More from Bloomberg:
Bloomberg Radio: https://twitter.com/BloombergRadio
Bloomberg Surveillance: https://twitter.com/bsurveillance
Bloomberg Politics: https://twitter.com/bpolitics
Bloomberg Originals: https://twitter.com/bbgoriginals
Watch more on YouTube:
Bloomberg Technology: https://www.youtube.com/@BloombergTechnology
Bloomberg Originals: https://www.youtube.com/@business
Bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake
Bloomberg Espanol: https://www.youtube.com/@bloomberg_espanol
Bloomberg Podcasts: https://www.youtube.com/@BloombergPodcasts