Despite its Own Historic Links, BHP is Starting on the Back Foot in South Africa

The BHP Group Ltd. has deployed a senior team including its chief executive officer to South Africa as the world’s largest miner ramps up efforts to win over government officials, regulators and local shareholders, all of whom could yet determine the outcome of its proposed tie-up with rival Anglo American Plc. The executives have already begun conversations with key stakeholders, focusing on explaining the detail of the existing $39 billion proposal — currently back on the drawing board after it was rapidly rejected by its target — and its benefits. Despite its own historic links, BHP is starting on the back foot in South Africa, where the now London-based Anglo was founded and remains a household name, after its approach for the smaller miner last week caught senior officials off-guard. BHP’s complex proposal includes a plan for Anglo to spin off its Johannesburg-listed platinum and iron ore units before an eventual takeover of the remaining assets. BHP’s team aims to engage with President Cyril Ramaphosa’s administration among other key stakeholders, the people said, laying out the exact detail of the multi-stage deal, plus the benefits of returning control of Amplats and Kumba to South Africa, with more of their cash flow likely to stay close to home and a larger free float on the Johannesburg Stock Exchange.

BLOOMBERG