"60 Trillion Won Is Too Low" Soaring Copper Prices Cause Another M&A Breakdown... 3rd Round of Negotiations Begins

Decarbonization and AI Boom Drive Rising Copper Demand

Anglo American Eyes Mines in Major Copper-Producing Countries Owned by Competitors

British mining company Anglo American has entered negotiations once again after twice rejecting a mega merger and acquisition (M&A) proposal from BHP, the world's largest peer company based in Australia.

According to the Wall Street Journal (WSJ) on the 22nd (local time), Anglo American announced that it has agreed to extend the deadline for BHP's acquisition offer. Anglo American stated, "Although BHP's third acquisition proposal is still undervalued," it added, "we are ready to continue cooperating with BHP regarding this matter." Therefore, BHP must announce whether it will start bidding by the 29th.

Previously, Anglo American rejected BHP's second acquisition offer worth ?34 billion (approximately 58.5 trillion KRW). Despite being about 10% higher than the first offer, Anglo American believed that BHP was undervaluing the company. Currently, Anglo American's market capitalization is about $45.5 billion (approximately 62 trillion KRW). This figure reflects a roughly 26% surge in its stock price following the news of BHP's acquisition proposal.

The reason BHP is keen on acquiring Anglo American is due to the rising demand for copper. Anglo American owns large-scale mines in Chile and Peru, major copper-producing countries. With the global movement toward decarbonization and the AI boom emphasizing wiring, the raw material copper continues to attract attention.

In particular, copper prices have been soaring recently, driven even by speculative demand. Since early March, prices have risen about 30%, surpassing $11,000 per ton this week, marking an all-time high.

BHP has shown strong determination to acquire Anglo American. In a statement issued by CEO Mike Henry on the same day, BHP said, "We look forward to working with the Anglo American board to find ways to pursue a merger."

If the negotiations are finalized, it is expected to be the largest mining deal in history. Additionally, BHP would become the world's largest copper producer, accounting for about 10% of global copper production. BHP and Anglo American currently produce 1.2 million tons and 800,000 tons of copper, respectively.

However, some investors have expressed reservations about the deal. Some BHP shareholders said the company is paying excessive costs to acquire copper, while some Anglo American shareholders expressed concerns that reckless mining destruction could damage value, WSJ reported.