by Melanie Burton, Scott Murdoch and Anousha Sakoui

MELBOURNE/LONDON (Reuters) – BHP said on Thursday it had submitted a $38.8 billion takeover offer to Anglo American, a deal that would create the world’s largest copper mining company, with a total stake of around 10%. of world production.

On the London Stock Exchange, around 08:50 GMT, Anglo American shares soared 12.85% to 2,488.515 pence, heading towards their biggest increase in a single session in four years. The stock recorded the best performance of the Stoxx 600 (-0.08%) and the FTSE 100 (+0.65%), allowing the latter index to record a record at 8,098.14 points.

“A deal means BHP would have access to a much greater amount of copper and iron ore. This is a key area for future growth and the markets are really realizing this with the impressive rise in the share price,” explains Fiona Cincotta. analyst at City Index.

The industrial metals miners index on the FTSE rose 1.91%.

BHP said it would offer Anglo American shareholders 25.08 pounds per share, a premium of 31%, and that it would spin off the British group’s iron ore and platinum assets.

Anglo American, which has mines in countries including Chile, South Africa, Brazil and Australia, said it was considering BHP’s “unsolicited, non-binding and highly conditional” proposal.

Under UK rules governing takeover bids, BHP Group has until May 22 to make a binding offer.

“THE FIRE IN THE SECTOR”

The deal, if completed, would likely trigger other deals in the mining sector, which has seen a spate of mergers and acquisitions as companies review their assets to increase their access to strategic metals.

“It’s all about copper,” said Ben Cleary, portfolio manager at Tribeca Investment Partners. “I think it’s a good deal for BHP. Anglo American is obviously in play and it’s possible that other players will step in. It’s going to ignite the whole industry.”

The takeover proposal comes after Anglo American, whose market capitalization stood at $37.7 billion (€35.20 billion) at the close of trading on Wednesday, began a review of its assets in February after its annual profit fell 94% and a series of writedowns due to a drop in demand for most of the metals it mines.

The market capitalization of BHP Group, the world’s largest mining company, was around $149 billion on Wednesday.

If agreed, the transaction would give BHP Group access to more copper, a metal essential to the energy transition, and potash, another resource of strategic importance.

The combined production of the mines of the two groups would amount to around 2.6 million tonnes per year, or around 10% of global production.

Anglo American forecasts copper production of 730,000 to 790,000 tonnes for 2024. BHP Group, for its part, is targeting copper production of between 1.7 million and 1.9 million tonnes for the 12 months ending in June.

(With contributions from Rishav Chatterjee, Pranav Kashyap and Sruthi Shankar in Bangalore, Siyi Liu in Beijing and Mai Nguyen in Hanoi, written by Miyoung Kim; Camille Raynaud and Claude Chendjou, edited by Blandine Hénault and Kate Entringer)

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