Anglo American has turned down a takeover proposal from its larger rival BHP, arguing that the offer goes against shareholder interest.
BHP, the world's largest mining company, announced yesterday that it would make an offer of £31 billion (around €36 billion) to merge with its competitor.
Anglo's stockholders would be given £25.08 per share as part of the deal.
"The board has considered the proposal with its advisers and concluded that the proposal significantly undervalues Anglo American and its future prospects," the London-listed company said in a statement.
The potential merger requires Anglo to spin off its platinum and iron ore businesses in South Africa in order to simplify operations - a condition criticised by the firm.
"The BHP proposal is opportunistic and fails to value Anglo American's prospects," said Stuart Chambers, chair of Anglo. "The proposed structure is also highly unattractive, creating substantial uncertainty and execution risk borne almost entirely by Anglo American, its shareholders and its other stakeholders."
The takeover bid comes after Anglo American noted a 94% decrease in profits last year and is part of BHP's strategy to increase copper production.
A deal between the firms would be the second major acquisition by BHP in about a year after its purchase of copper miner Oz Minerals in 2023.
Anglo has copper mines in countries like South Africa, Chile, and Peru and the metal represents 30% of its total production.
Given copper's crucial role in the green energy transition, global demand for the commodity is already increasing - and is expected to continue growing.
Copper prices on the London Metal Exchange have surged by 15% this year, approaching $10,000 a tonne (€9,355).
If the merger were to go ahead, which now hinges on an improved offer, the combined company would generate about 10% of global copper supply.
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