Anglo’s Billionaire Investor Puts Mining on Cusp of M&A Era – by Jesse Riseborough, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – March 17, 2017)

Anil Agarwal’s surprise move into Anglo American Plc suggests the mining industry may be on the cusp of a new wave of deals.

For years, Anglo has been the subject of takeover speculation and during the worst of the commodities crisis it seemed on the verge of a breakup. It spent last year getting back on firmer footing, but the 2 billion pound ($2.4 billion) investment by one-time Anglo suitor Agarwal has sparked the return of speculation about the company’s future.

“I’m pretty sure every investment banker in London is running around, dusting off old pitch books and going to every major in town,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said by phone. “This feels to me a little like the last cycle, when the first mover precipitated a round of consolidation.”

Agarwal’s strategy is still unclear, but $21 billion Anglo has a vast collection of some of the best mining assets in the world. If the assets are split, it would represent the most significant change to the mining industry in years and likely attract rivals including Rio Tinto Group and Glencore Plc.

Anglo shares slipped 0.5 percent to 1,291 pence on Friday, paring yesterday’s 8.6 percent advance. After a failed approach to merge Hindustan Zinc Ltd. with Anglo last year, Agarwal said the combination was a “good match” and that “one and one wasn’t going to be two, but 11.”

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