BHP's Revised Proposal for Anglo American plc

BHP Group Limited (ASX: $BHP) has confirmed the submission of a revised proposal to the Board of Directors of Anglo American regarding a potential combination to be effected by way of a scheme of arrangement. The proposal comprises an all-share offer for Anglo American subject to the pro-rata distribution by Anglo American of its entire shareholdings in Anglo American Platinum Ltd (Anglo Platinum) and Kumba Iron Ore Ltd (Kumba) to Anglo American shareholders immediately before completion of the scheme of arrangement. The Revised Proposal follows BHP's initial proposal for a potential combination with Anglo American which was made to the Board of Directors of Anglo American on 16 April 2024.

Executive Commentary on Revised Proposal

'BHP put forward a revised proposal to the Anglo American Board that we strongly believe would be a win-win for BHP and Anglo American shareholders. We are disappointed that this second proposal has been rejected. The revised proposal represents a 15% increase in the merger exchange ratio and increases Anglo American shareholders' aggregate ownership in the combined group to 16.6% from 14.8% in BHP's first proposal. BHP and Anglo American are a strategic fit and the combination is a unique and compelling opportunity to unlock significant synergies by bringing together two highly complementary, world class businesses. The combined business would have a leading portfolio of high-quality assets in copper, potash, iron ore and metallurgical coal and BHP would bring its track record of operational excellence to maximise returns from these high-quality assets. The combined business would also have the balance sheet strength, capital discipline and operational capability to execute the attractive pipeline of growth options in BHP and Anglo American's portfolios. In putting forward a revised proposal, we have been guided by our capital allocation framework and our view of the fundamental value of Anglo American and BHP. The combination is consistent with BHP's strategy and the revised proposal is underpinned by a focus on delivering long term fundamental value.'

Summary of Revised Proposal and Outlook

BHP Group Limited has made a revised proposal to the Board of Directors of Anglo American regarding a potential combination, which has been designed to ensure the Demergers are sequenced to complete immediately before the scheme of arrangement becomes effective. The proposal includes an increased number of BHP shares to be received by Anglo American shareholders and offers up to two positions on the Board of the combined entity. The terms of the Revised Proposal represent an increase over the Initial Proposal, providing a compelling opportunity for long term fundamental value-creation for both sets of shareholders. The benefits of the Revised Proposal to Anglo American shareholders and other stakeholders include a greater immediate and substantial premium, unlocking value, and delivering meaningful synergies across procurement, operations, and marketing. The proposal also aims to retain BHP's global listings and provide Anglo American shareholders with the benefits of directly holding their interests in Anglo Platinum and Kumba. The benefits to BHP shareholders include increasing exposure to future facing commodities, complementing portfolios, and delivering meaningful synergies and value through the combination. BHP remains committed to its capital allocation framework and maintains a disciplined approach to mergers and acquisitions.