BHP's increased and final offer ratio for Anglo American plc

BHP Group Ltd (BHP) has submitted an increased and final offer ratio to the Board of Directors of Anglo American plc as part of its proposal for a potential combination with Anglo American to be effected by way of a scheme of arrangement. The revised proposal follows BHP's initial and second proposals and 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 and Kumba Iron Ore Ltd to its shareholders immediately before completion of the scheme of arrangement. The deadline for BHP to announce a firm intention to make an offer for Anglo American has been extended to 29 May 2024.

Executive commentary on the revised proposal

'BHP has put forward a final offer ratio of 0.8860 BHP shares for each Anglo American share. This is a significant increase from our first proposal and would provide Anglo American shareholders with 17.8% of a combined BHP and Anglo American. The revised proposal is underpinned by BHP's disciplined approach to mergers and acquisition and our focus on delivering long term fundamental value. BHP's revised proposal will offer immediate value for Anglo American shareholders and allow them to benefit from the long-term value generation of the combined group. BHP looks forward to engaging with the Board of Anglo American to explore this unique and compelling opportunity to bring together two highly complementary, world class businesses.' - Mike Henry, BHP Chief Executive Officer

Summary of the revised proposal and outlook

BHP Group Ltd (BHP) has submitted an increased and final offer ratio to the Board of Directors of Anglo American plc for a potential combination with Anglo American. The revised proposal offers 0.8860 BHP shares for each Anglo American share, representing approximately 17.8% of the combined BHP and Anglo American group on completion of the potential combination. The proposal also includes the distribution of ordinary shares in Anglo American Platinum Ltd and Kumba Iron Ore Ltd to Anglo American shareholders. The combined group would have a leading portfolio of large, low-cost, long-life Tier 1 assets focused on iron ore and metallurgical coal, along with future facing commodities. BHP is committed to a combination that leverages the best of both BHP and Anglo American and intends to offer Anglo American up to two positions on the Board of the combined entity. The revised proposal is non-binding and subject to customary conditions including completion of due diligence to the satisfaction of BHP. BHP is confident that it can obtain all required regulatory approvals and consummate a transaction that benefits customers globally. The terms of the proposal represent a total value of approximately £31.11 per Anglo American ordinary share. The Final Offer Ratio will not be increased, except under specific circumstances. The revised proposal represents an increase in the spot aggregate £ value per Anglo American ordinary share over the Second Proposal of 11.3%. The terms of the revised proposal represent an increase over the Initial Proposal of 24.8% in the merger exchange ratio and BHP Share Consideration, and 20.4% in Anglo American shareholders' aggregate ownership in the enlarged group. BHP believes that the Final Offer Ratio represents a compelling opportunity for long term fundamental value-creation for both Anglo American and BHP shareholders. The deadline for BHP to announce a firm intention to make an offer for Anglo American has been extended to 29 May 2024, and the proposal is subject to the UK Takeover Code. The announcement does not amount to a firm intention to make an offer, and there is no certainty that an offer will be made. BHP has made this announcement without prior agreement or approval of Anglo American.