The world’s largest mining company BHP Group Ltd. has made a binding offer to buy Australian copper producer OZ Minerals Ltd. for $6.4 billion, the biggest deal in more than a decade.
The A$28.25/share offer, first announced in November, will now be submitted to shareholders for approval in late March or early April, according to a statement by BHP. The first offer for 25 Australian dollars per share was rejected by OZ Minerals six months ago.
The purchase, which is backed by OZ Minerals, will solidify BHP’s position as one of the world’s largest producers of copper, an important metal in the clean energy transition, for which demand is forecast to grow nearly 60% over the next twenty years.
The company said metals to be used in the clean energy transition, including nickel and potassium as an ingredient in fertilizers, are key to its growth as iron ore use stabilizes and the world wants to phase out fossil fuels.
The last big deal was when BHP bought Petrohawk Energy Corp. for $12.1 billion in 2011. OZ Minerals, which operates the BHP Olympic Dam mine in South Australia, will boost BHP’s annual copper production by around 7%. The company is also active in Brazil and on an important project in Western Australia.
BHP’s recent activities have been associated with the reduction of the coal business, and the company also sold its oil and gas unit to the Woodside Energy Group.
The deal will be financed by a combination of existing cash reserves and BHP equivalents, as well as proceeds from a new credit facility.
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