By Christian Moess Laursen

Anglo American outlined a group restructuring that includes plans to offload its platinum-metals and diamonds units as it seeks to fend off a takeover bid from bigger rival BHP.

The multinational, diversified mining company said Tuesday it will spin off its platinum-metals subsidiary Anglo American Platinum, divest or demerge its diamond unit De Beers, sell its steelmaking coal assets, while exploring options for its nickel operation before divesting it.

"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction," Chief Executive Duncan Wanblad said.

The shake-up comes after Anglo on Monday rejected a sweetened takeover proposal from rival BHP that valued the company at almost $43 billion, in what would be the biggest mining deal on record. In a call with media on Tuesday, Wanblad reaffirmed BHP's bid significantly undervalues Anglo, even more so after the restructuring.

BHP's interest in Anglo is partly driven by an eagerness to boost its copper profile. Demand for the red metal is expected to rise as the world moves to low-carbon energy and supply tightens. It represents about 30% of Anglo American's output, and its portfolio includes prized assets in Chile and Peru.

London-based Anglo said it expects the restructuring--which the company called its most radical in decades--will create upside for shareholders.

The company will move toward what it calls a future-enabling portfolio, with assets that will support the global energy transition. Copper, iron and crop nutrients will remain key in Anglo's portfolio, it said.

Part of BHP's proposed deal was a spin-off of Anglo's South African assets, Anglo American Platinum--or Amplats--and Kumba Iron Ore, which have been hamstrung by tumbling commodity prices, persistently high costs and continued logistical strains over the past year.

On Tuesday, Anglo said the platinum business is to be spun off as keeping it would limit the subsidiary and parent company's full value.

Amplats--the world's biggest platinum producer--has seen its shares slump 32% over the past twelve months.

In February, the unit said it could cut around 3,700 jobs in a restructuring to address the challenges. This is still continuing, Anglo said.

Anglo's Wanblad said the planned demerger is a result of a widespread strategic review, launched last year, and is independent of BHP's approach.

He added the regulatory processes for the demerger proposed by BHP and the one for Anglo spinning it off as proposed Tuesday differ vastly.

The reorganization will reduce group costs by $1.7 billion, in addition to its annual cost-savings of $1 billion, which it added it remains on track to meet this year. It is expected to complete by the end of 2025, the CEO said.

The strategic review, started in December, follows a lagging share performance as several of Anglo's assets struggled with weak commodity-prices, rising inflationary costs and operational headwinds.

Last month, The Wall Street Journal reported the company held early conversations with potential buyers for its storied De Beers diamond unit, which it values at more than $7 billion.

The unit--which Anglo is now exploring either a sale or a demerger for--lowered its full-year production guidance last month on weak demand as an uncertain economic outlook and slower growth in China mean diamond businesses are taking cautious approaches.

Meanwhile, nickel prices have fallen 14% over the last twelve months, as Indonesian supply has flooded the market, hampering earnings from Anglo's nickel business. Anglo said it has taken urgent action to limit the impact of this squeeze on cash flow, while exploring options for care and maintenance and a sale.

It will keep its crop-nutrients operations in the U.K., Woodsmith, although it plans to slow down the development and reduce capital expenditure to $200 million next year, with no capex planned in 2026. As a result, first production has been pushed back from 2027.

U.S. activist investor Elliott Investment Management has increased its stake in Anglo to 3.1%, valued roughly at $1.4 billion, in recent months, before BHP's bid, although it hasn't shared its intentions. The investor declined to comment on Anglo's reorganization.

At 0907 GMT, shares were down 3.0% at GBP26.26.

Write to Christian Moess Laursen at

(END) Dow Jones Newswires

05-14-24 0541ET