M&A

Anglo to sell or demerge De Beers, Amplats and coking coal business

Wanblad: response to offer sees most radical changes in decades

Anglo to sell or demerge De Beers, Amplats and coking coal business

Anglo American has set out a plan to focus attention on its copper and iron ore assets while selling, putting in care and maintenance, or demerging its other businesses, it said today.

These changes come after the company rejected two takeover proposals by BHP over the last month, the most recent for around $34bn, and before the 22 May deadline in which BHP has to make a formal offer.

"These actions represent the most radical changes to Anglo American in decades. I believe these are the right decisions to position Anglo American to capitalise on the outstanding resource endowment opportunities within our portfolio today," chief executive Duncan Wanblad said.

In the release, Anglo set out that it will hold onto its copper assets, reminding the market that it holds three of the top ten producing copper assets in South America. It added that its iron ore business across Brazil and South Africa is "ideally suited to support steel decarbonisation".

It also said it would slow down the development of Woodsmith, bringing capex to a total of $200 million in 2025 and no capex in 2026. This was expected to be around $1 billion per year.

Divestments

However, elsewhere, the company aims to divest its steelmaking (coking) coal assets and is currently responding to strong buyer interest, it said.

In nickel, where the company has three operating assets all producing ferronickel (the Barro Alto mine, now in its ramp-up phase, and Codemin, both in Brazil; and Loma de Níquel in Venezuela), Anglo will seek to put these in care and maintenance or divest.

Amplats, meanwhile, is to be demerged.

"Anglo American Platinum's assets have exceptional geological potential, and Anglo American is currently setting up Anglo American Platinum to be resilient and deliver sustainable returns through the cycle as one of the world's leading PGMs producers, despite the current cyclical downturn," the company said.

"It is, however, increasingly clear that if Anglo American were to retain Anglo American Platinum in its portfolio, it limits the ability to have the full value of both businesses fully reflected, limiting the ability of both Anglo American and Anglo American Platinum to achieve their full potential," it added.

De Beers is to be divested or demerged, it added.

"Anglo American's shareholders will see the full undiluted upside from these extensive changes, with the value of our copper and iron ore assets brought to the fore," Wanblad said.

"This next step in the transformation of Anglo American's portfolio is set to accelerate the recognition of value that has been inherent in our business for many years and provide Anglo American's shareholders with undiluted and differentiated participation in the major structural demand trends, while minimising any frictional costs associated with this major portfolio transformation," he added.

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