BHP Group Ltd.’s bold move to acquire Anglo American Plc. and become a global copper giant has raised concerns about potential pushback from China, the company’s biggest customer. With a $39 billion bid on the table, BHP is looking to solidify its position as a top copper producer, but this ambitious plan may face obstacles from Chinese regulators.
Authorities in China have a history of intervening in international mergers, especially in the mining sector, to protect the country’s interests. Chinese copper processors are currently struggling to make profits due to high prices from miners like BHP, and the prospect of BHP gaining more control over the market could spark increased scrutiny from Beijing.
Bloomberg Intelligence analysts have highlighted the possibility of Chinese regulators forcing asset sales as a condition for approving the deal, similar to past cases involving other mining companies. BHP CEO Mike Henry faces a complex challenge in navigating the potential obstacles, including Anglo’s rejection of the bid as undervaluing the company.
The State Administration for Market Regulation in China holds significant power in competition cases and is likely to involve industry regulators and experts in assessing the impact of the acquisition. With copper playing a crucial role in advanced manufacturing and clean energy sectors, such as solar panels and batteries, the deal is expected to draw keen interest from Beijing.
While concerns about the deal’s impact on China’s purchasing power remain, the combined BHP-Anglo steelmaking coal business is not expected to raise as many red flags, as BHP’s overall share in the market remains relatively stable. As the global mining industry watches closely, the fate of BHP’s bid and its implications on the copper market will continue to unfold in the coming days.
