By Christian Moess Laursen


Anglo American outlined a group restructuring that includes plans to offload its platinum-metals and diamonds units as it seeks to fend off a takeover bid from bigger rival BHP.

The multinational, diversified miner said Tuesday it will spin off its platinum-metals subsidiary Anglo American Platinum, divest or demerge its diamond unit De Beers, sell its steelmaking coal assets, while exploring options for its nickel operation before divesting it.

"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction," Chief Executive Duncan Wanblad said.

The shake-up comes after Anglo on Monday rejected a sweetened takeover proposal from rival BHP that valued the mining company at almost $43 billion, in what would be the biggest mining deal on record.

The London-based miner said it expects the changes will create upside for shareholders, with the value of its copper and iron assets remaining part of the group.

The restructure--which the company called its most radical in decades--is aimed at pivoting the company toward a 100% so-called future-enabling portfolio, with assets that will support the global green-energy transition. Copper, iron and crop nutrients will remain key in Anglo American's portfolio, it said.

The reorganization will reduce costs by $1.7 billion, in addition to its annual cost-savings of $1 billion, which it added it remains on track to meet this year.

The strategic review, started last year, follows a lagging share performance. Several of Anglo American's assets have been struggling with weak commodity-prices, rising inflationary costs and operational headwinds.

Last month, The Wall Street Journal reported the company held early conversations with potential buyers for its storied De Beers diamond unit, which it values at more than $7 billion.

Anglo said Tuesday that it is exploring a full range of options to separate the business in order to set it up for success.

Its Johannesburg-listed subsidiary Anglo American Platinum--the world's biggest platinum producer--has seen its shares slump 32% over the past twelve months as the sector has suffered from tumbling prices and persistent inflationary costs.

In February, the unit said it could cut around 3,700 jobs in a restructuring to address these challenges. This is still continuing, Anglo said Tuesday.

Anglo said the unit is to be spun off as keeping it would limit the ability for both businesses to achieve their full value.

Meanwhile, nickel prices have fallen 14% over the last twelve months, as Indonesian supply has flooded the market, hampering earnings from Anglo's nickel business.

It will keep its crop-nutrients operations in the U.K., Woodsmith, although it plans to slow down the development and reduce capital expenditure to $200 million next year, with no capex planned in 2026.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

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