BHP Anglo American deal could be the biggest mining transaction in over a decade
Australia’s mining giant BHP group has
put down nearly 39 billion dollars to
try to scoop up its smaller London based
rival Anglo American Anglo which owns
mines in Chile South Africa Brazil and
Australia said its board is reviewing
the proposal which would create the
world’s biggest copper Miner uh this
comes amid a Scramble for metals to
power the global shift to clean energy
well let’s talk to Joshua Mahoney uh
Chief Market Analyst at scope Market
Joshua welcome back good to see you if
if this takeover goes goes ahead I mean
it would create one of the mining
Industries largest deals in donkey’s
years how significant is
it yes certainly look ultimately the
mining industry generally does rely on
sort of companies coming together rather
than constantly having to expand uh the
footprint of the firm uh organically so
big deals have happened in the past but
it does feel like there’s been a
significant L of course the lacks of BHP
biltin actually came about through a
significant merger in itself but this
really counts towards uh one of the
biggest deals in the last over a decade
really and it comes at a time when
people within the UK are really worrying
about this idea that businesses are
undervalued in the footsie 100 well
certainly there is a feeling that Anglo
americ is undervalued and it feels like
it’s a prime target for what is going to
be a a significant ific theme going
forward in terms of the electrification
uh the introduction of EVS wind farms
and like really rying on copper so
copper is really at the at the Forefront
of this deal why does BHB want to own
anglo-american well ultimately this is a
case of diversification uh to some
extent I mean it Al it does add on to
their iron or assets which is
essentially makes up the the bulk of
bhp’s uh revenues that’s the the main
determinant um but like I said copper is
really a big play anyone that’s that’s a
keen Commodities Trader will have
noticed that over the past month two
months we’ve seen a massive rip in terms
of copper prices up 23% since the
February low and that could just be the
beginning because this idea that we’re
going to see a big expansion in terms of
electric vehicles and the
electrification around the world really
is going to rely on copper as being
Central to that theme so it’s getting
ahead of the curve yes we’ve seen a
strong rally in terms of copper of late
um but certainly there’s an expectation
that that could continue for for years
ahead and that means that BHP it can
really start to get into a position
where because they if this deal went
ahead would be controlling 10% of the
global copper Supply then they would be
in a much better position to also be
able to determine uh exactly the prices
that are being paid for it and also
drive down costs uh by creating a much
bigger company at a time when of course
everyone has been focusing on trying to
drive down costs given the the rise in
inflation and wages that have gone with
it and what are the markets uh make of
this how have they uh
reacted well as is often the case when
you see takeover bids or stories around
it the company that’s being taking over
suddenly sees this massive appreciation
as people think that they’re going to
get a significant windfall bear in mind
that the offer came in at around 30%
higher than uh the price prior to this
Spike that we’ve seen today uh well the
share price has risen 16% so there’s
still some concern that maybe it won’t
go through and but there’s also the flip
side of it where the BHP shareholders
are looking at around about a 3% loss on
the day as they’re concerned that
perhaps the company is paying out a lot
of money and there’s a lot of concern
that potentially it’s going to take a a
meaningful amount of time for them to
take advantage of that so people are
always concerned about a company
becoming overly bloated Joshua good to
see you thanks for your time Joshua
Mahone Chief Market Analyst at scope
markets
Chief Market Analyst at Scope Markets Joshua Mahony speaks to CGTN Europe about the Australian multinational mining and metals company BHP Group Ltd. proposed takeover of Anglo American.