BHP's US$39bn bid for Anglo American: What's next?

Although Anglo American rejected BHP's US$39bn takeover offer, plans to form an international mining giant remain on the table, triggering increases in metals prices.

BHP may reaffirm – or cancel – the offer by May 22, according to statements from the mining companies.

In a response to the rejection, BHP said in a statement that a combination would have created a portfolio of assets with high long-term potential and operations at low costs and synergies, and would have promoted the exchange of best practices, “which would improve profitability of Anglo American.”

BHP's offer would have required Anglo to divest its stakes in the platinum and iron ore operations in South Africa.

Anglo American president Stuart Chambers said in a statement the company was well positioned and that "the BHP proposal is opportunistic and fails to value Anglo American’s prospects."

BHP is a major global miner with a market value of US$142bn, while Anglo's is US$40.2bn as of Friday.

Amid the negotiations, US investment group Elliott Investment Management has increased its Anglo American stake to nearly US$1bn, increasing the pressure on the company.

Andrés Rioseco, head of market and strategy at consulting firm Mesadinero, told BNamericas that the impact of the announcement on the price of copper and other metals "was positive, since the offer suggests that there is a strong appetite for mining assets. It is difficult for the offer to be accepted, since Anglo shareholders consider it poor. Furthermore, it was announced that activist fund Elliott Management has taken a strong position in Anglo."

Chile's finance minister Mario Marcel downplayed the possibility that a possible deal would affect state copper company Codelco, the world's top producer. "Codelco isn't always preoccupied with being No.1. Mergers and acquisitions occur in the copper market, as in many other sectors," he said during the Enade business convention.

Neil Wilson, chief market analyst at finance company Finalto, described the offer as "monstrous" in Australian media, since it would create the largest publicly traded copper miner and producer in the world.