LONDON (AP) — BHP Group has dropped its 38.6 billion pound ($49.3 billion) bid for Anglo American, ending plans to create a global mining giant focused on copper and other minerals that are expected to drive the transition to renewable energy.
Melbourne, Australia-based BHP announced the decision late Wednesday, after last-minute overtures failed to ease Anglo’s concerns about the the complexity of the proposed deal. Anglo American earlier rejected a request to extend Wednesday’s deadline for BHP to submit a formal offer.
“BHP will not be making a firm offer for Anglo American,” CEO Mike Henry said late Wednesday in a statement to the London Stock Exchange.
London-based Anglo American repeatedly rebuffed BHPs bid, saying the structure of the deal created too much risk for Anglo shareholders. The proposal would have required Anglo American to spin off two South African units, Anglo American Platinum and Kumba Iron Ore, as BHP sought to focus on copper, coking coal used in steel production and potash, a widely used fertilizer.
BHP had sought to ease those concerns, saying it was willing to talk about a break fee payable by BHP if regulators in South Africa failed to approve the deal. The company also pledged to continue investing in the South African economy and maintain Anglo American’s charitable commitments in the country.
But those assurances, announced on Wednesday morning in London, failed to win over Anglo American’s board.
“In aggregate, BHP has not addressed the board’s fundamental concerns relating to the disproportionate execution risk associated with the proposed structure and the value that would ultimately be delivered to Anglo American’s shareholders,” the company said.