FT News Briefing Will investors buy Anglo American’s break-up plan?
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May 15, 2024 The Biden administration is pushing for Arab participation in a multinational force for post-war Gaza. Anglo American plans to break itself into three divisions to fend off a £34bn takeover attempt by BHP. As the US raises tariffs on various Chinese imports, the mining sector faces new challenges, particularly with a looming copper shortage. Meanwhile, Singapore's new Prime Minister grapples with navigating tensions between the US and China, all while addressing domestic issues like cost of living and income inequality.
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Anglo American's Break-Up Plan
- Anglo American plans to break itself up to thwart a £34bn takeover bid from BHP.
- This strategic move aims to appease shareholders by showcasing a clear value creation plan.
Anglo American's Restructuring
- Anglo American's restructuring involves simplifying to three core divisions: copper, iron ore, and crop nutrients.
- They will spin off or sell platinum, metallurgical coal, De Beers diamonds, and potentially nickel operations.
BHP's Takeover Bid and Anglo's Response
- BHP's takeover offer pressured Anglo American to accelerate its strategic revamp, highlighting underperforming divisions like De Beers and platinum mines.
- These divisions suffer from structural market issues, masking the value of Anglo's prime copper assets.