'No Birth of "No.1 Guri Dinosaur"... BHP Abandons Anglo American Acquisition'

Australia's largest mining company, BHP Group, has abandoned its $49 billion (approximately 67.4 trillion KRW) acquisition of rival Anglo American. The anticipated creation of the world's largest copper producer also fell through.

[Image source=Reuters Yonhap News]

On the 29th (local time), BHP Group announced its intention to abandon the acquisition, stating it had no intention of making further offers to Anglo American with less than an hour remaining before the negotiation deadline. Bloomberg reported that "the five-week-long public standoff between the two companies abruptly ended."

Previously, Anglo American rejected BHP's initial and revised acquisition proposals, claiming its value was underestimated. Last week, both parties extended the deadline and continued negotiations, but ultimately failed to reach an agreement due to differences over corporate structure and other issues.

Anglo American had expressed reluctance to approve BHP Group's demand to separate its platinum and iron ore divisions, citing increased regulatory risks and cost burdens in South Africa. Although BHP emphasized its commitment to securing regulatory approval in South Africa, Anglo American reportedly voiced concerns that this could lead to shareholder value losses.

Initially, BHP planned to expand its copper business?whose demand is growing due to recent renewable energy infrastructure transitions and the AI boom?through this acquisition. Anglo American, which owns large copper mines in Chile and Peru, derives 30% of its total revenue from copper. Had the merger succeeded, BHP would have become the largest copper supplier, producing 10% of the world's total copper.

However, there were also expectations that acquisition negotiations would be difficult due to Anglo American's complex corporate structure. Anglo American is the major shareholder of Anglo American Platinum (a platinum mining company listed on the South African stock exchange), Kumba Iron Ore, and De Beers (a diamond mining company). This complex structure was also the reason BHP Group demanded the separation of the platinum and iron ore divisions.

Meanwhile, on the London Stock Exchange, Anglo American's shares closed down more than 3% compared to the previous session. However, this level remains significantly higher than before the acquisition talks were made public at the end of last month. BHP Group closed slightly lower on the New York Stock Exchange on the same day.