BHP Group Limited (BHP) announced withdrawal of its final attempt to acquire Anglo American PLC (NGLOY) and expand its leadership in copper. The decision comes just weeks before shareholders at Anglo and Canada’s Teck Resources (TECK) are scheduled to vote on a planned merger. Following the announcement, BHP shares in Australia (AU:BHP) gained 0.62% on Monday.
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Notably, BHP produces a range of commodities, including iron ore, coal, copper, nickel, and more. Meanwhile, Anglo American is known for platinum production, along with diamonds, copper, and iron ore.
BHP Drops Anglo American Takeover Bid
Bloomberg News reported on Sunday that BHP had made a bid to acquire Anglo American, hoping to block its planned merger with Canada’s Teck Resources. However, Anglo rejected the proposal.
On Monday, BHP announced it is no longer pursuing a possible merger with Anglo American after early discussions with the company’s board. The update was released through the Australian Securities Exchange shortly after reports of the talks surfaced on Sunday.
Nonetheless, BHP said it still believes a merger with Anglo American would have made strategic sense and created value for shareholders. However, the company added that it remains confident in growing its business on its own.
BHP Withdraws Its Final Attempt
The latest withdrawal marks the second time in two years that BHP has tried and failed to acquire Anglo American. Last year, the company dropped a $49 billion offer after disagreements over regulatory risks and costs in South Africa. BHP’s plan to separate Anglo’s platinum business became politically sensitive and faced government pushback.
Following the rejections last year, BHP chose to focus on smaller projects instead where the company said it sees stronger value opportunities. Meanwhile, some analysts believe BHP’s recent bid may have been motivated by concerns that a combined Anglo-Teck group would become too large to acquire in the future.
For context, Teck and Anglo American agreed to merge in September, forming one of the biggest mining deals in history. The combined company is expected to produce about 1.2 million tons of copper annually, at a time when global demand for the metal is rising due to electric vehicles, infrastructure, and clean energy needs. Shareholders from both firms will vote on the merger next month.
What Is the Prediction for BHP?
According to TipRanks’ consensus, BHP stock has been assigned a Moderate Buy rating, backed by one Buy and two Holds assigned over the last three months. The BHP share price target is $50.50, which is 5% below the current trading price.
