NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROMANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION THIS ANNOUNCEMENT IS AN ANNOUNCEMENT UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION 

FOR IMMEDIATE RELEASE

BHP Group Ltd (“BHP”) notes the announcement by Anglo American plc (“Anglo American”) in response to recent press speculation regarding a proposal by BHP for a potential combination with Anglo American.

BHP confirms that on 16 April 2024 it made a proposal to the Board of Directors of Anglo American regarding a potential combination to be effected by way of a scheme of arrangement. BHP’s 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 before completion (“Proposal”).

Under the terms of the Proposal, ordinary shareholders of Anglo American would receive:

• 0.7097 BHP shares for each ordinary share in Anglo American; and
• ordinary shares in Anglo Platinum and Kumba (which would be distributed by Anglo American to its shareholders in direct proportion to each shareholder’s effective interest in Anglo Platinum and Kumba).

The terms of the Proposal would, based on closing market prices as at 23 April 2024, being the last trading day prior to press speculation, represent:

• a total value of approximately £25.08 per Anglo American ordinary share¹ including £4.86 in Anglo Platinum shares and £3.40 in Kumba shares, valuing Anglo American’s share capital at £31.1 billion;
• a premium on the implied market value of Anglo American’s unlisted assets² of approximately 31 per cent;
• a premium on the implied market value of Anglo American’s unlisted assets² of approximately 78 per cent. to the volume weighted average closing price of Anglo American’s shares (adjusted for the attributable volume weighted average closing prices of Anglo Platinum and Kumba) in the 90 trading days prior to and including 23 April 2024; and
• a 19% premium to the broker median net asset value of Anglo American excluding Anglo Platinum and Kumba of USD21.8 billion^1,3.

The Proposal is non-binding and subject to customary conditions including completion of due diligence to the satisfaction of BHP. Anglo American has been offered reciprocal due diligence on BHP.

In addition to allowing Anglo American shareholders to realise an immediate and substantial premium over the current value of their Anglo American shares, the combination would deliver further ongoing value for Anglo American shareholders.

• The combination would bring together the strengths of BHP and Anglo American in an optimal structure. Anglo American would bring its assets and long-term growth potential. BHP would bring its higher margin cash generative assets and growth projects along with its larger free cash flows and stronger balance sheet.
• The combined entity would have a leading portfolio of large, low-cost, long-life Tier 1 assets focused on iron ore and metallurgical coal and future facing commodities, including potash and copper. These would be expected to generate significant cash flows and the combined entity would have the financial capacity to support value adding growth projects at the optimal time, while continuing BHP’s commitment to shareholder returns.
• The combination would also deliver meaningful synergies, including from sharing best practice, creating procurement, operational and marketing synergies and eliminating duplication, which would enhance profitability and value for Anglo American shareholders.
• The combined entity would retain BHP's global listings on the ASX, LSE, JSE and NYSE and Anglo American shareholders would be able to benefit from the BHP’s monthly share trading liquidity of approximately US$10 billion.
• The Proposal would provide Anglo American shareholders with the benefits of directly holding their interests in Anglo Platinum (78.6%), the world’s leading PGM miner, and Kumba (69.7%) as shareholders, including enabling direct access to the future value generation and dividends of Anglo Platinum and Kumba. Additionally, Anglo American shareholders would gain the ability to calibrate
  their relative exposures and determine their optimal shareholding levels in Anglo Platinum and Kumba..

The combination is consistent with BHP’s strategy including its focus on long term fundamental value and its capital allocation framework and would be attractive to BHP’s shareholders. The benefits to BHP shareholders would include:

• increasing BHP’s exposure to future facing commodities through Anglo American’s world class copper assets;
• complementing BHP’s iron ore and metallurgical coal portfolios with Anglo American’s high quality iron ore operations in Brazil and metallurgical coal assets in Queensland, Australia;
• providing Anglo American’s value adding copper growth options and increased geographic diversification of operating footprint; and
• delivering meaningful synergies.

Anglo American’s other high quality operations including its diamond business would be subject to a strategic review post completion.

In addition, Anglo American has a deep pool of talented people who would continue to make a valuable contribution to the successful operation of Anglo American’s assets within the combined group. BHP also believes the combination would also be attractive to communities where greater financial strength could support further development.

BHP is committed to its capital allocation framework and maintains a disciplined approach to mergers and acquisitions.

This announcement does not amount to a firm intention to make an offer and there can be no certainty that an offer will be made. There is no certainty that any form of agreement or transaction will be reached or concluded.

As stated in the announcement made by Anglo American on 24 April 2024, in accordance with Rule 2.6(a) of the Code, BHP must, by not later than 5.00 p.m. on 22 May 2024, either announce a firm intention to make an offer for Anglo American under Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies (see below in Important Notices). This deadline can be extended with the consent of the UK Panel on Takeovers and Mergers in accordance with Rule 2.6(c) of the Code.

Pursuant to Rule 2.5 of the Code, BHP reserves the right to vary the form and/or mix of the offer consideration and vary the transaction structure. BHP also reserves the right:

• to amend the terms of any offer (including making the offer on less favourable terms and/or at a lower value):
  • with the agreement or consent of the Anglo American Board; or
  • following the announcement by Anglo American of a Rule 9 waiver pursuant to the Code; or
  • if a third party announces a firm intention to make an offer for Anglo American at a lower price and/or on less favourable terms than contemplated under the terms of this proposed offer; and/or
• if Anglo American announces, declares, makes, or pays any dividend or any other distribution or return of value to shareholders, to make an equivalent reduction to its proposed offer; and/orto implement the proposed offer by means of a takeover offer as opposed to a scheme of arrangement.

This announcement is being made by BHP without prior agreement or approval of Anglo American.

Footnotes

¹ The number of fully diluted Anglo American shares assumed excludes shares held by Tarl Investment Holdings Limited, Epoch Investment Holdings Limited, and Epoch Two Investment Holdings.
² Anglo American’s unlisted assets comprises the entirety of Anglo American’s assets excluding its shareholdings in Anglo Platinum and Kumba. The premia are based on the value of BHP’s share consideration offered versus Anglo American’s share price less Anglo Platinum’s and Kumba’s attributable share prices.
³ Net asset value is based upon a median of the six brokers which disclose SOTP, including Anglo Platinum and Kumba, alongside latest reported Anglo Platinum and Kumba net cash balances as of 31 December 2023.