Glencore Mulls Rival Bid for Anglo American After BHP's $39B Offer

Glencore Plc is considers, making, bid, says for Anglo American Plc, a 107-year-old mining company, after Anglo rejected a $39 billion all-stock takeover proposal from BHP Group Ltd last week. Anglo-American's prized copper assets in Chile and Peru are believed to be a key attraction for Glencore and other potential suitors.

Why this matters: The potential takeover battle between Glencore and BHP for Anglo American's copper and iron ore assets could have significant implications for the global supply of critical minerals, particularly with the green-energy transition driving demand for these resources. The outcome of this deal could reshape the mining industry and influence the pace of the energy transition. The outcome of this deal could reshape the mining industry and influence the pace of the energy transition.

According to Reuters, citing unidentified sources, Glencore has had internal preliminary discussions about a potential bid, although these may not necessarily lead to an approach to Anglo. A Glencore spokesperson told Reuters: "The company doesn't comment on rumor or speculation."

BHP's proposed deal, which Anglo American rejected, biggest, mining, takeover, history, valued the company at $39 billion and included the split-off of Anglo American Platinum Ltd and Kumba Iron Ore Ltd in South Africa. Anglo American deemed the proposal "opportunistic" and significantly undervaluing the company and its future prospects.

Following the news of Glencore's potential interest, Anglo American's shares rose 3.1% to 2,743.00 pence in London and 3.7% to ZAR639.91 in Johannesburg on Friday. Meanwhile, Glencore's shares fell 1.4% to 452.45p in London and 1.8% to ZAR104.99 in Johannesburg.

The high demand for copper and iron ore, driven by the green-energy transition, makes Anglo-American's assets particularly attractive to potential buyers. Copper prices have risen by 15% this year, adding to the value of Anglo's copper mines in Chile and Peru. The company's high-grade iron ore mines in South Africa are also in demand for their use in forging green steel.

Activist hedge fund Elliott Management has also taken an interest in Anglo American, acquiring a 2.5% stake valued at $1 billion and then increasing its position. The involvement of Elliott Management suggests that Anglo American's value may not be fully realized, potentially anticipating further bids for the company.

A potential takeover battle between Glencore and BHP for Anglo-American could have significant implications for the mining industry. Both companies are major players in the sector, and the acquisition of Anglo American's high-quality, low-cost mines would bolster the company's position in the market.

The green-energy transition continues to drive demand for copper and high-grade iron ore, Anglo American's attractive assets and the involvement of activist investors suggest that further bids may be on the horizon. The outcome of this potential takeover battle could reshape the mining industry and have far-reaching consequences for the global supply of critical minerals.

Key Takeaways

• Glencore is considering bidding for Anglo American after BHP's $39B offer was rejected.
• Anglo-American copper assets in Chile and Peru are a key attraction for suitors.
• The deal could reshape the mining industry and impact the green-energy transition.
• Activist investor Elliott Management has a 2.5% stake in Anglo American, anticipating further bids.
• The outcome could influence the global supply of critical minerals like copper and iron ore.