BHP Group Limited (ASX:BHP)'s $75 billion takeover bid for Anglo American plc (LSE:AAL) is all but over after the London-based miner walked away from negotiations, saying it could not accept the structure of the BHP deal on offer. The final rejection came early on the London market, with the Anglo board saying it would not accept BHP's demand to shed its shares in its South African platinum and iron ore mines ahead of any merger agreement. BHP had earlier asked Anglo to extend negotiations for another week, as the mining giant tried to convince its smaller counterpart it could make a deal work.

But Anglo's board on May 29, 2024 night (AEST) killed off any possibility of a friendly deal, saying it would not ask the UK Takeovers Panel for another week's extension to negotiations - required under UK corporations rules. The decision leaves BHP until the close of the London market to make a decision whether to make a binding takeover offer for Anglo, or to walk away. BHP had said it would not make a firm offer without being offered reasonable due diligence into Anglo's assets, and that it would not change the structure of its bid or increase the number of shares on offer.

If BHP says it will not make a firm offer, it will be forced to sit on the sidelines for six months after putting Anglo into play - excluding one additional offer in the period, with the permissions of the UK takeovers authorities, or if a rival suitor makes an alternative bid for Anglo. Anglo said that BHP's attempts to win its support for the divestment of its dominant stakes in Amplats and Kumba Iron, both listed on the South African market, had consisted of a "limited number of socioeconomic measures that were confined in scope, impact and duration and that BHP stated would support regulatory approvals". "This approach does not sufficiently address the fact that Anglo American's shareholders would bear disproportionate execution and value risks and uncertainty over an extended period, nor does it consider that material conditions would likely be imposed in relation to both Anglo American Platinum and Kumba which would require the approvals of their respective board," the company said in a statement.

BHP released a statement to the Australian market late on May 29, 2024, saying it had genuinely tried to address Anglo's concerns about its deal structure, which would require Anglo to shed its South African platinum and iron ore interests ahead of any broader deal, including the offer of a "reverse break fee" to allay concerns within the Anglo board at the risks of the transaction falling on its own shareholders. "BHP believes that the proposed measures it has put forward provide substantial risk protection for Anglo American shareholders and supplement the significant value uplift that Anglo American shareholders will receive from the potential combination," the company said. "BHP believes a further extension of the deadline is required to allow for further engagement on its proposal." BHP's move to get back on the front foot was aimed at ramping up pressure on the Anglo board, and was pitched directly at joint Anglo and BHP shareholders the mining giant believes want to see a deal done.

On May 29, 2024, BHP released for the first time details of the raft of measures it has proposed to allay the Anglo board's concerns that its shareholders will carry the risk and costs of spinning out assets. The mining giant believed the decision will highlight its concerns that Anglo's board is using its criticism of BHP's proposed deal structure as a regulatory defence, and has no real intention of negotiating a friendly takeover agreement. Anglo rejected BHP's latest sweetened $75bn offer a week ago, dropping complaints the offer undervalued its copper and coking coal assets, but saying its board had unanimously rejected the latest bid due to concerns its shareholders would wear all of the risks of spinning out its shareholdings in Amplats and Kumba Iron.

Anglo's concerns centred around not just the distribution of its dominant shareholding position in both South African-listed companies, but also around the change of ultimate control that might trigger the need to negotiate with the South African government over public interest tests. At stake is the fate of the 1800 workers in Anglo's corporate offices in the country, as well as potential requirements for an increased shareholding in Amplats and Kumba for employees under the country's black economic empowerment policy framework. On May 29, 2024, BHP said it had offered direct responses to Anglo's concerns, including offering the South African government a three-year guarantee to maintain staffing levels in the country, sharing any costs of employee share schemes, and establishing a mining centre of excellence in the country to train mine workers and to conduct research and development for BHP's global mining operations.

BHP's public statements come as South Africans head to the polls in national elections that could see the ruling African National Congress forced into power sharing arrangements for the first time since the end of the former apartheid regime.