BHP Group gives up and abandons its attempt to buy Anglo American worth £39bn after it rejected expand acquisition talks, since the deadline for the agreement ended this Wednesday. «While we believed that our proposal for Anglo American was a compelling opportunity to effectively grow the value pie for both sets of shareholders, We were unable to reach an agreement with Anglo American on our differing views regarding regulatory risk and cost in South Africa. and, despite trying to engage constructively and numerous requests, we were unable to access from Anglo American the key information required to formulate measures to address the excess risk they perceive,» the world's largest mining company explained in a statement. Likewise, the company has stressed that it continues «to believe that our proposal was the most effective in delivering value to Anglo American shareholders«, and we are confident that, working together with Anglo American, we could have obtained all the required regulatory approvals, including in South Africa.» BHP had requested before the opening of the session a further extension to the deadline after Anglo had rejected its third acquisition proposal. In a statement reported by various media, the British miner stated that BHP's latest offer did not address the board's «fundamental concerns related to the disproportionate execution risk» surrounding the deal, and that they have decided not to grant an extension of the deadline beyond the deadline. It should be remembered that time was against us, and BHP had until this Wednesday at 5:00 PM, British time, at most, to make a formal offer for Anglo. American or withdraw after the extension of the deadline that was agreed last week. That is precisely why the Australian company had asked to extend the deadline, highlighting that it had put a series of «socioeconomic measures» on the table to address concerns about its offer, although I believed that more time is needed to carry out negotiations. Both companies had been negotiating since May 22, although the agreement has not been possible despite the fact that the latest proposal valued Anglo American at £38.6bn. The British company has rejected each of the proposals (there have been up to three) considering that they undervalued the company. According to Anglo American itself, its board of directors «has unanimously concluded that there is no basis for a further extension of the deadline.» BHP, in its note, however, pointed out that «a further extension of the deadline is required to allow greater commitment to your proposal». Furthermore, the Australian miner insisted that the risks associated with its acquisition plan are «quantifiable and manageable» and that the costs of the planned measures had already been included in its offer. «BHP is confident that the measures it has proposed to the Anglo American board provide a viable path to resolve the issues raised by Anglo American and would support South African regulatory approvals,» the Australian noted. She said this in reference to the controversy that her offers had sparked, which required that Anglo American to spin off its two South African businesses, a demand that the Pretoria government did not like at all and to which the British company itself was firmly opposed. In fact, the president of Anglo, Stuart Chambers, said it would create «substantial uncertainty» and executive risk for the company. That is why the statement this Wednesday morning increased the pressure on Anglo American, which has rejected this request since it had previously established an alternative plan to divide its business but maintain its independence, with the aim of being able to respond to the measures that BHP had proposed until now. The last of these included, among other things, maintaining Anglo American's Johannesburg office at current staffing levels, listing BHP shares in South Africa and also sharing the costs of increasing ownership of the two units by South African employees, if necessary. Some measures that he would maintain, as he said, for at least three years.
TIME IS RUNNING OUT
Dan Coatsworth, investment analyst at AJ Bell, has appreciated the Australian firm's request, saying that «as a desperate student who is running out of time to meet a deadline, BHP is asking for another extension to submit a formal bid for Anglo American.» And he added that «the company says it has made significant concessions to help close the deal, especially in relation to the delicate situation in South Africa, who has a great interest in the transaction», but the truth is that «the deadline is met today, so there is very little time to waste if you want to carry out the acquisition».