Anglo American has rejected an $84 billion merger bid by its rival Xstrata and slammed terms of the proposed deal as “totally unacceptable”.
The Anglo board has rejected the bid for its potential to “significantly dilute” the miner’s exposure to lucrative platinum, iron ore and diamond markets and increase its exposure to less attractive nickel and zinc markets.
In a statement released by Anglo American yesterday, the South African-based miner said the approach “lacked strategic merit” and was unattractive to its shareholders.
Anglo’s chief executive Cynthia Carroll has urged the board to reject the bid and signalled further approaches from Xstrata would be “unwelcome” and “likely to be rejected”.
Xstrata chief executive Mick Davis has expressed his disappointment at the rejected offer, which he said would add “substantial value to both companies”.
Davis is said to be reluctant to make a hostile bid for Anglo because it may complicate dealings with competition authorities.
It is unclear whether Xstrata will improve its offer for Anglo.