Australian mining giant BHP Group confirmed on Thursday that it had made an all-stock takeover proposal to Anglo American PLC, valuing the smaller rival at 31.1 billion pounds (about 38.8 billion U.S. dollars).
Anglo American investors will receive 0.7097 BHP shares for each share they hold, as well as shares in Anglo American Platinum and Kumba Iron Ore.
As of Wednesday\’s close, Anglo American\’s market value was 27 billion pounds.
BHP Billiton said in a statement: \”This merger will combine the strengths of BHP Billiton and Anglo American in an optimal structure.
Anglo American will bring its assets and long-term growth potential.
BHP will bring higher-margin cash-generating assets and growth projects, as well as greater free cash flow and a stronger balance sheet.
” Anglo American said late on Wednesday that it had received an unsolicited all-stock merger proposal from BHP Billiton and that the board of directors was conducting an evaluation.
BHP\’s proposal comes with a condition that Anglo American divest its platinum and iron ore operations in South Africa first, the company added.
If the acquisition goes ahead, it would mark BHP\’s return to large-scale deals.
