BHP Unlikely to Disrupt Anglo American, Teck Resources Merger

Investors and bankers have expressed skepticism about the likelihood of BHP, the world's top mining company, disrupting the proposed 53 billion dollar merger between Anglo American and Teck Resources. The merger, announced on Tuesday, is set to become the second-largest acquisition in mining history, creating a new global mining giant with a core focus on copper mining.

BHP had previously attempted to acquire Anglo American for 49 billion dollars, but the deal fell through after three unsuccessful takeover bids. Since then, BHP has shifted its strategy towards smaller, high-value projects. This shift is seen as a sign that BHP is unlikely to pursue a takeover of either Anglo American or Teck Resources.

One investor, who holds BHP shares, noted that BHP's recent signals indicate a move away from large-scale acquisitions. The investor pointed out that BHP has been focusing on expanding its copper assets, including a 2 billion dollar investment in two Argentine copper mines and efforts to increase production at its Escondida mine in Chile. This strategy suggests that BHP is more interested in organic growth and strategic investments than in high-stakes mergers and acquisitions.

BHP declined to comment on whether it would interfere with the Anglo American and Teck Resources merger. However, the company's CEO has stated that mergers and acquisitions are just one of many ways to achieve growth. The CEO also noted that finding a target that meets BHP's criteria for commodity type, asset quality, and value for shareholders is challenging in the current market environment.

Despite recent setbacks in selling its Australian coal assets, Anglo American has taken steps to boost its stock price, which has risen by 20% since BHP's takeover bid in April. This has led some to speculate that Anglo American could use a similar defensive strategy to fend off any potential takeover attempts by BHP.

The merger between Anglo American and Teck Resources is designed to favor Canada, making it difficult for other large companies to replicate. For example, the new company's headquarters would be located in Canada, a condition that was not met in BHP's previous merger with Billiton in 2001. The Australian government had required the new company's controlling headquarters to be located in Australia at the time.

Leadership changes at BHP may also be a factor in the company's reluctance to pursue large-scale acquisitions. The company's chairman and CEO have both been in their roles for several years, and the company may be focused on finding successors rather than pursuing high-stakes mergers and acquisitions.

However, bankers have not ruled out the possibility of BHP intervening in the future, especially if the Anglo American and Teck Resources merger faces delays or setbacks. The merger is expected to take 12 to 18 months to complete, giving BHP plenty of time to consider its options.