One of the biggest ASX M&A stories of 2024 so far was the potential merger between ASX mining share and global giant BHP Group Ltd (ASX: BHP) and British copper titan Anglo American plc (LSE: AAL).
Back in April, investors were greeted with the news that BHP had lobbed a takeover offer to Anglo American. This potential merger grabbed investors' attention. After all, it would have seen the $216 billion BHP swallow up the $63.5 billion Anglo American. That's a merger that would have had few rivals in modern history in terms of size and scale.
It wasn't to be. Anglo rejected three increasingly expensive offers for a full acquisition from BHP. The final $74 billion offer got its marching orders back in late May.
Many investors assumed that was the end of this failed courtship. But a new statement from BHP out today might indicate otherwise.
BHP held its annual general meeting for 2024 yesterday. According to reporting from Reuters, BHP chair Ken MacKenzie appeared to pour cold water on the idea that BHP could revisit a merger with Anglo. He was quoted as stating this:
We made an approach to Anglo American earlier this year … we thought there was an opportunity here to create something unique and special, a bit of a sort of a one plus one equals three opportunity…
Unfortunately, Anglo American shareholders had a different view, and they thought there was more value in the plan that their management wanted to execute. And so they moved on. And quite frankly, so have we.
So end of story, right?
Well, not so fast.
Image source: Getty Images
The 'Big Australian' keeps a foot in Anglo American's door
Firstly, it's worth noting that BHP is currently subject to British takeover restrictions. These restrictions dictate a six-month regulatory freeze on making any new approaches to Anglo American after its failed bids.
With that in mind, let's discuss the statement that BHP put out this morning in response to its chair's comments yesterday.
In this ASX statement, BHP told investors the following:
BHP… notes the press reports of comments made by BHP in response to questions at its Annual General Meeting on 30 October 2024 regarding Anglo American… BHP clarifies that these comments were not intended to be a statement to which Rule 2.8 of the UK City Code on Takeovers and Mergers (UK Code) applies, nor intended to carry any other consequences under the UK Code.
The UK Takeover Panel Executive has confirmed that the comments made will not be treated as a statement of intention not to make an offer in respect of Anglo American for the purposes of Rule 2.8 of the UK Code. BHP remains bound by the Rule 2.8 restrictions set out in its announcement dated 29 May 2024, which apply for six months from the date of that announcement, subject to the reservations set out in that announcement.
That's rather wordy, but the key takeaway phrase here is arguably, "the comments made will not be treated as a statement of intention not to make an offer in respect of Anglo American".
So, it seems that owners of BHP shares could still see Anglo American join the fold, even if it seems unlikely (judging by the chair's comments yesterday). Let's see what happens when that six-month freeze expires next month.
BHP share price snapshot
BHP shares have had a rough 2024; there's no way around it. The mining giant remains down by around 15.6% year to date and 4.1% over the past 12 months.
At the current (at the time of writing) BHP share price of $42.68, this ASX 200 blue chip is trading on a dividend yield of 5.17%.
