BHP Picks the Worst Moment to Return to Mining Megadeals – by David Fickling (Bloomberg News – January 20, 2022)

(Bloomberg Opinion) — Mining’s biggest dealmaker is getting out its checkbook again. It could scarcely have picked a worse time. BHP Group has built up its takeovers team and is looking at a transformational deal, people familiar with the matter told Bloomberg News this week.

Candidates could include copper miner Freeport-McMoRan Inc., Glencore Plc, or the base-metals business of Vale SA, the people said.

That shows all the timing of a crypto investor buying Bitcoin at $60,000. Freeport’s market capitalization is at a record, while Glencore shares are around their highest level in a decade. Less than two years ago, when fears of Covid-19 were rampant, you could have bought the equity in both companies together for $25 billion or so. Nowadays, they’d cost more than five times as much.

For all BHP’s reputation as an aggressive buyer of assets, it’s mostly been lucky or sensible enough to avoid destructive mergers and acquisitions. Since the 2001 takeover of South Africa’s Billiton Plc and the 2005 purchase of WMC Resources Ltd. created the core of the current company, it has been more notable for the bids that failed than those that succeeded.

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