Australian miner BHP Group has reportedly decided against making a fresh bid for rival UK-based mining company Anglo American, citing the rising valuation of the latter.
Anglo American’s recent stock price gains have made a potential deal too expensive for the Australian miner to pursue at this time, stated Financial Times reported citing sources with knowledge of the matter.
According to the reports, BHP’s previous £38.6bn takeover attempt was ultimately unsuccessful, and the company now sees Anglo American’s elevated share price as a significant barrier to another acquisition attempt.
Anglo American’s shares have surged nearly 40% over the past 12 months, currently trading above £25, compared to approximately £21 during BHP’s initial bid. In contrast, BHP’s stock has declined by 17% over the same period.
The British mining company’s valuation increase is attributed to its ongoing restructuring programme, which includes the disposal of its coal, diamond, and platinum assets.
The strategy, announced after BHP’s initial bid, has been well-received by investors. Anglo American secured $3.8bn from the sale of its coal assets to Peabody in November 2024 and $4.9bn for additional coal operations in Australia last year.
Further asset sales are in progress, with Anglo American nearing a deal for its Brazilian nickel mines and preparing to spin off its South African platinum business later this year.
The company is also exploring an initial public offering (IPO) for its De Beers diamond business, though this could be delayed until next year.
These moves are expected to reshape Anglo into a smaller but more focused miner, with 54% of its revenues derived from copper and the remainder from iron ore.
BHP has indicated that any future acquisitions will depend on market conditions and valuations.
Since stepping away from the Anglo American bid, BHP has explored other opportunities, including a $3bn joint bid with Canada’s Lundin Mining for copper explorer Filo Mining.
