Anglo American, a major mining company in the UK, has turned down a request from rival BHP to extend the time for submitting a final bid on a proposed £39 billion merger.
Ahead of the nation’s elections on Wednesday, Australian BHP made an effort to allay worries regarding its intentions for Anglo American’s operations in South Africa.
It promised things like job stability for those who worked there, but it also stated that it required more time for negotiations “to allow further engagement” on the proposals.
However, unless BHP modifies its offer by Wednesday at 17:00, Anglo’s decision puts the mega-merger in peril.
Since Anglo American turned down BHP’s initial acquisition attempt, a £31.1 billion bid, at the end of April, the two have been at odds over the deal.
Anglo then rejected BHP’s second £34bn offer at the start of May and its third offer of £38.6bn last week, but some Anglo shareholders urged the company to keep negotiating.
Anglo and the South African government have also cited concerns about BHP’s proposal to spin off the South African businesses.
After rejecting BHP the third time, Anglo announced its own plans to break up its business by selling or spinning off major parts of the firm including its De Beers diamond operation and its platinum division, with a view to focusing on key areas such as copper, premium iron ore and crop nutrients.
BHP has made a series of proposals it said it would keep for at least three years to ease Anglo’s concerns.
These include maintaining current staff levels at Anglo’s Johannesburg office, keeping BHP listed on the Johannesburg Stock Exchange, and sharing the cost of increased South African employee ownership “if required to secure regulatory approvals”.
