BHP Withdraws Offer for Anglo American

Highlights:

• BHP Withdraws Offer: BHP Group Ltd confirms it will not make a firm offer for Anglo American plc, following an inability to reach agreement on regulatory risks and costs.
• Failed Negotiations: Despite multiple proposals and attempts to address concerns, Anglo American's Board rejected BHP’s final offer valued at £31.11 per share on May 22, 2024.
• Regulatory Concerns: BHP sought to share costs related to South African regulatory approvals but lacked access to critical information from Anglo American to mitigate perceived risks.

BHP's Decision Announced

BHP Group Ltd (ASX: BHP) has officially announced that it will not make a firm offer for Anglo American plc. This announcement complies with Rule 2.8 of the UK City Code on Takeovers and Mergers. The statement emphasizes that BHP retains the right to reconsider this decision under specific conditions, such as a third-party offer for Anglo American or a significant change in circumstances.

BHP's Position on the Proposal

BHP's CEO, Mike Henry, explained that while BHP saw potential value in a merger, it could not reach an agreement with Anglo American regarding concerns over South African regulatory risks and costs. BHP had attempted to address these concerns but was unable to obtain crucial information from Anglo American necessary for mitigating these risks.

Details of the Rejected Proposal

On May 20, 2024, BHP submitted a final offer ratio to Anglo American's Board, valuing the potential combination at £31.11 per share. This followed earlier proposals on April 16 and May 7. Despite efforts to engage with Anglo American and address their concerns, the Board rejected BHP's revised proposal on May 22, 2024.

BHP's Disappointment

BHP expressed disappointment over the Board's decision to end discussions. BHP believed there was a viable path to resolve Anglo American’s concerns, including sharing costs associated with South African regulatory approvals. BHP maintains that its proposal offered immediate value and long-term benefits for Anglo American shareholders through the combination of the two companies.

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