Glencore is plotting a takeover offer for Anglo American that would spark a bidding war with rival BHP.
The mining giant’s top brass are weighing up an approach for Anglo after the London-listed miner rejected BHP’s £31billion bid last week.
An offer would kick off a bidding war for the 107-year-old mining company, with BHP also working on an improved deal.
BHP boss Mike Henry arrived in South Africa yesterday to sweet talk officials amid fears a takeover could be derailed by opposition in the country.
Anglo was founded in Johannesburg in 1917 and retains close ties to the country.
Bidding war?: Glencore is holding preliminary, internal discussions about making an offer for Anglo
The South African government is the miner’s second biggest shareholder. The firm has become a takeover target at a politically charged time, with the country going to the polls this month.
Glencore is holding preliminary, internal discussions about making an offer for Anglo, Reuters reported.
The firm has not yet approached Anglo and discussions may not result in a bid, but a Glencore spokesman refused to comment on ‘market rumour or speculation’.
Bidders are eyeing up Anglo’s copper mines in Peru and Chile amid a rush to cash in on soaring demand for the metal.
Copper is used in everything from cars to power grids and construction as well as the development of clean energy and artificial intelligence. Analysts expect a copper shortage this year while demand grows, as it is crucial to the energy transition.
Russ Mould, investment director at broker AJ Bell, said: ‘The big prize is scooping up a ready-made portfolio of copper assets, a much easier way of increasing scale in a key metal for the energy transition than having to drill thousands of holes on exploration projects to find new supplies.’
Anglo and Glencore each own 44 per cent of the Collahuasi mine in Chile, estimated to have some of the world’s largest reserves of copper. At the same time, Anglo’s sprawling portfolio includes platinum, iron ore, steelmaking coal, diamonds and a fertiliser project.
BHP would sell Anglo’s diamond unit De Beers, insiders said, while the future of its Woodsmith mine in North Yorkshire is in doubt. And under the proposal, Anglo would have to sell its shares in its platinum and iron ore businesses in South Africa, a country BHP – the world’s largest listed company – exited in 2015.
The company was forced to issue a statement on Thursday saying its plans to dump two of Anglo’s South African businesses did ‘not reflect a view on [the country] as an investment destination’.
A deal with Glencore could face less opposition in the country, analysts said.
