Anglo American laid out plans on Tuesday to refocus on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off the BHP group’s $43 billion takeover offer.
The announcement comes a day after the London-listed miner rejected its Australian suitor for the second time in less than three weeks, saying an increased proposal continued to significantly undervalue the company.
Anglo said on Tuesday it would divest its steelmaking coal assets, demerge its South African platinum unit, explore options for its nickel mines and divest or demerge diamonds business De Beers. The group expects the new configuration will lower costs by $1.7 billion.
“We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction,” Anglo CEO Duncan Wanblad said.
Anglo shares were down 3.3 per cent at £26.17 by 1224 GMT.
Moving to drum up support for his proposal, BHP CEO Mike Henry said on Tuesday it was down to investors to weigh the merits of his company’s offer for Anglo.
BHP’s £27.53 per share approach, raised from an initial £25.08, would require Anglo to sell its iron ore and platinum assets in South Africa, where it employs more than 40,000 people. That has caused alarm in South Africa, where unemployment and a stagnant economy are major issues ahead of a May 29 election.
Wanblad said BHP’s bid had forced him to accelerate plans for a spin-off of Johannesburg-listed Anglo American Platinum (Amplats).
Anglo will keep its South African Kumba iron ore business, while Wanblad said the planned divestment of Amplats would be “different” in terms of time and complexity to the BHP proposal.
South Africa’s mines minister Gwede Mantashe said on Tuesday he had no problem with Anglo’s proposal, and that he hoped it would continue to resist BHP’s bid.
Anglo is also exploring an initial public offering of De Beers, two people familiar with the matter said, with one flagging London as the preferred venue.
Reuters
