BHP made a $59.6 billion offer to acquire a British copper mining company named Anglo American has already been rejected.
👉 Background: BHP originated from Broken Hill, NSW in 1885 and has become the largest mining company in the world. It covers everything from coal to copper to iron ore and petroleum.
👉 What happened: BHP made a $59.6 billion offer to acquire a British copper mining company named Anglo American late last week - but this offer has already been rejected.
👉 What else: Anglo American’s share price has been struggling recently with its shares down more than 47% in the past two years. And since this deal would help BHP shift further away from fossil fuels, it's expected that BHP will chase this opportunistic acquisition with a sweetened offer.
💡 Opportunistic acquisitions occur when a company tries to capitalise on unique circumstances that make a potential target vulnerable.
💡BHP’s bid is priced 16% above Anglo’s last share price close, but that is still more than 30% lower than where Anglo American's share price was sitting just two years ago. And given Anglo cut its production targets recently to conserve cash, you can bet investor confidence is drying up.
💡 Although this deal may be incredibly complex, BHP could strike metaphoric gold if it manages to pull off this deal, especially since copper is crucial to both the energy transition and the artificial intelligence boom.
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