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South Africa: Anglo Open to Mergers But Looking for Value
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Business Day (Johannesburg)
20 June 2008
Posted to the web 20 June 2008
Sure Kamhunga
Johannesburg
ANGLO American CE Cynthia Carroll said yesterday the group had evaluated possible merger opportunities but had not yet found anything that could excite its shareholders.
The company's share price soared 8,4% on Tuesday to a peak of R547 on the JSE after the UK's Observer reported that Brazil's Vale was lining up a takeover bid.
The Anglo rumour followed last week's report in Brazilian newspaper O Estado de Sao Paulo that Vale had made informal inquiries about copper and gold producer Freeport-McMoran as well as Anglo.
Vale intends amassing a war chest of $15bn through an offer of shares on June 30 to finance expansion of existing businesses and possible acquisitions, according to a major shareholder in the company, Previ pension fund. But Vale, which called off talks in March to acquire global mining group Xstrata, denied it was engaged in takeover talks.
Carroll confirmed consolidation was taking place in the global mining sector, but Anglo had yet to find an investment that would create shareholder value.
"I believe there will be in all likelihood further consolidation," she said after addressing the Royal Institute of International Affairs in London.
When asked about China buying into such companies as Rio Tinto and speculation of an Anglo bid by Vale, she said Anglo was continually evaluating its business and opportunities.
"We're regularly looking, we're regularly refreshing, we're regularly assessing what it means to be independent, what the embedded value potential is in Anglo.
"So far, we have not established that there is the right fit to create shareholder value, but we are open for business, we are flexible, we're always looking. I don't expect that we're going to be swallowed up by the Chinese tomorrow," Carroll said.
Meanwhile, in her address Carroll said 90% of Anglo's assets were now in Africa and South America, where the group had a $40bn investment programme on approved projects and others at various stages of feasibility planning.
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With Reuters
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