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Would BHP have a go at Sandfire?

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Question asked 18/05/2024

Would BHP have a go at Sandfire?

Hi Thanks for the excellent anaysis of BHP's second, and rejected, bid for Anglo in Tuesdays report. If we assume that BHP don't come back for another crack at AAL and decide to walk away, where do you think they'll look next? Seeing as they were mainly after Anglo's copper assets, is there a chance that BHP would be thinking about having a go at Sandfire? Being a pure copper company it would seem to suit BHP's ambitions very nicely. And they could probably buy Sandfire with money from the petty cash tin. Cheers, Carl

Answer

Hi Carl,

Never say never, however there is no real operational overlap between BHP and SFR’s Copper assets. BHP’s copper assets are in Chile, South Australia (Olympic Dam +Prominent Hill and Carrapateena post OZL acquisition), Peru, US & Canada. Sandfire’s DeGrussa mine in WA has been wound down, and their concentrating development in Spain (MATSA) and Botswana (Motheo).

You are right, BHP could swallow the $4.4bn SFR very easily, having paid $9.6bn for OZL, but we don’t think they will. They need something bigger to turn the dial for them, Anglo for instance is a ~$66bn potential deal, with the value of their Copper assets probably around $20bn. BHP would only make small acquisitions if they fit easily into their existing operations.

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BHP Group (BHP) v Sandfire Resources (SFR)

LAST UPDATED 16/05/2024 15:27

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