Diversified miners Glencore (OTC:GLNCY) and Anglo American (OTC:NGLOY) offer a better match than that proposed in BHP Group‘s (NYSE:BHP) offer for Anglo, RBC Capital Markets analyst Marina Calero said in a note to clients on Friday.
Last week, Australia-headquartered BHP said it had made a $39 billion offer for London-based Anglo, which swiftly rejected the proposal as too low. This week, Reuters reported that Glencore, which is based in Switzerland, is considering a bid for the UK miner.
"We see the potential for a GLEN/AAL combination to have higher synergies vs. BHP/AAL given the closer proximity of the assets and the potential synergies for GLEN’s marketing division," Calero said.
Also Read: Copper Is A Hot Commodity: Bidding War for Anglo American May Emerge After BHP’s ‘Low Ball’ Offer — ‘Let The Games Begin’
Copper assets are at the heart of both companies' interest in Anglo as the red metal is a key component of electric vehicles and renewable energy installations, demand for which is accelerating as nations around the world transition away from fossil fuels. All three diversified miners are also involved in coal.
"Mining synergies would largely come from the South American copper division and the Australian coal assets," Calero said.
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Related tickers: BHP, GLNCY, KIROY, SOUHY, NGLOY, ANGPY.
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