Less than a day after rejecting BHP’s (ASX:BHP) second takeover offer, Anglo American says it is starting its so-called Plan B to revamp itself—and do several things that BHP wanted, such as getting rid of some assets.
The London-based company revealed what it called “a clear, compelling, and decisive plan to unlock significant value from its portfolio and accelerate the delivery of consistently stronger shareholder returns.”
Following completion of the asset review started last year, Anglo American says it will implement a number of major structural changes to accelerate delivery against its strategic priorities of operational excellence, portfolio simplification, and growth:
The struggling miner said Tuesday that it will spin off its platinum-metals subsidiary Anglo American Platinum, divest or demerge its 85%-owned diamond unit De Beers, sell its steelmaking coal assets (five mines in Australia), while exploring options for putting its nickel operation on care and maintenance before divesting it. Copper and iron ore in South Africa and Brazil will be retained.
“We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction,” CEO Duncan Wanblad said in a statement.
The restructure is aimed at pivoting the company toward a 100% so-called future-enabling portfolio, with assets that will support the global green-energy transition. Copper, iron, and crop nutrients will remain key in Anglo American’s portfolio, Anglo said.
The reorganization will reduce costs by $US1.7 billion, it said.
On Monday, Anglo American rejected a second, sweetened takeover proposal from rival BHP that valued the mining company at almost $US43 billion, in what would be the biggest mining deal on record.
BHP wanted Anglo to sell out of the platinum company, as well as the majority-owned Kumba Iron Company and keep the copper, iron ore in Brazil and the Australian coal mines—it would look at divesting De Beers once it had control of Anglo.