Anglo American has laid out plans 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 BHP Group’s $64.4 billion raised 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 $US1.7 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 fell 3.2 per cent to close at 26.19 pounds, after trading at the bottom of the London stock market’s benchmark index FTSE 100.
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, adding he would have preferred to continue talking with Anglo in private.
“Our strong preference was to be able to hold these discussions with Anglo in private,” Henry said. “Rather unfortunately, it got leaked.”
BHP’s 27.53 pound per share approach, raised from an initial 25.08 pounds, 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 AMSJ.J (Amplats).
Under Tuesday’s plan, Anglo will keep its South African Kumba Iron Ore business, while Wanblad said the planned divestment of Amplats would be “completely 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 its diamond business De Beers, two people familiar with the matter told Reuters on Tuesday, with one flagging London as the preferred venue. Anglo declined to comment.
The company also said on Tuesday it would slow the development of its Woodsmith fertiliser project in northeast England and seek strategic partners. First production at Woodsmith will be pushed back from 2027, Wanblad said.
The divestment of Anglo’s steelmaking coal operations could move rapidly, he added, given available interest.