Anglo American rejects £31bn mega-deal with rival
Getty Images Anglo American has rejected a £31.1bn takeover proposed by rival miner BHP, branding it "highly unattractive" and "opportunistic".
BHP confirmed on Thursday that it had approached Anglo American about a deal which would create the world's largest copper producer.
But Anglo American has rebuffed the approach, in particular the plan to significantly restructure its business.
BHP wants to buy Anglo American for its copper operations.
Copper is used to conduct electricity and demand is growing as some economies shift to renewable energy and electric vehicles.
Anglo American owns two copper mines, in Chile and Peru where BHP also has some operations.
A deal would bring together two of the industry's biggest mining companies and could face significant competition hurdles if it went ahead.
Copper prices rose above $10,000 per tonne for the first time in two years after news of the proposal emerged.
Fawad Razaqzada, analyst at City Index, said: "While there is an increasing demand propelled by the green transition and infrastructure development, concerns have risen regarding supply disruptions stemming from factors such as labour strikes, regulatory alterations, and operational hurdles at mining sites.
"There are some fears that BHP's bid to acquire Anglo American would further limit copper production growth, just as demand is likely to rise given that the metal is vital for the green transition."
BHP has proposed spinning off Anglo's platinum and South African iron ore divisions. But Anglo said that under BHP's plan its business would bear the brunt of any major changes that may needed to get regulatory approval.
“The BHP proposal is opportunistic and fails to value Anglo American’s prospects," said Anglo American's chair Stuart Chambers.
He added: "The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders."
Anglo American's share price edged down on Friday to £25.47, just above the price per share BHP is offering for its smaller rival.