London, England – BHP Group, an Australian mining company, announced on Wednesday the necessity of an extension to talks with Anglo American, its takeover target. The deadline for discussions is approaching, prompting BHP Group to propose “socioeconomic measures” to address concerns over its bid. However, the company emphasized the need for more time to continue discussions.
The offer values Anglo American at £38.6 billion ($49.2 billion), according to previous calculations by Reuters. BHP Group stated in a release that a further extension of the deadline is crucial for additional engagement on its proposal. Both rival miners have until 5 p.m. London time on Wednesday to reach an agreement after a week-long extension from the previous deadline.
Anglo American responded to BHP Group’s request, indicating that it will address the matter in due time. Following the news, shares of Anglo American initially dropped by 2.2% at market open before recovering slightly to trade down by 1.3%. Conversely, BHP Group’s stock rose by 1.2% amid the ongoing discussions.
BHP Group’s significant takeover bid is part of its strategy to establish a dominant position in copper mining and capitalize on the metal’s importance in the green energy transition. Despite BHP’s persistence in their offers, Anglo American has consistently rejected them, citing undervaluation concerns and potential risks associated with demands to de-merge from two South African entities. The British miner’s Chairman, Stuart Chambers, expressed worries about the potential uncertainty and risks that such a de-merger could pose for the company.