After rejecting two offers—the latter for $43 billion—the 107-year-old Anglo is taking a different strategy, announcing plans to restructure the group, including selling its diamond business De Beers.

The goal? To prove to shareholders that Anglo can hold its own as a standalone group. 

The recent tug-of-war between the two behemoths is mostly about Anglo’s copper business. The metal has been in high demand recently as it’s used in electric vehicles and other green technologies. 

If BHP’s offer was, in fact, green-lit by Anglo, their joint entity could have been the world’s largest copper producer. 

BHP is a more significant player than Anglo in the mining industry at large, with a market cap three times larger and copper production 50% higher. 

However, Anglo grew its output in the segment by 24% last year, it reported in February, and its extensive South American operations have made it appealing to those betting on soaring copper demand in the future. The London-listed group also has a significant presence in fertilizer and iron ore.

Back and forth

Anglo’s restructuring plan came as a surprise to many, and not least to BHP, which will surely be considering its options.

“This is not the direction BHP wanted to go,” Lachlan Shaw, an analyst from UBS Group said. “The Anglo rejection and this potentially will have caught them by surprise and they would maybe have expected to be engaged in further discussions.”

The Australia-based BHP’s initial offer to Anglo, valued at $39 billion, demanded that it spin off its controlling stakes in its platinum and iron ore business before a potential acquisition. 

After this offer was rejected, BHP returned with a fresh proposal worth nearly $43 billion, which also lifted Anglo shareholders’ share of the combined entity marginally. BHP still required Anglo to sell portions of its business as part of the deal, but the British multinational saw that structure as “highly unattractive.”

“We are disappointed that this second proposal has been rejected,” BHP CEO Mike Henry said in a statement Monday.     

All the back and forth between the two mining majors has increased pressure on Anglo to accelerate its turnaround plans sooner than planned. 

Shareholders have long highlighted that the strong parts of the company’s portfolio have been dragged down by lackluster performance in other segments, including diamonds, demand for which has been hit by shifting consumer tastes and the rise in lab-grown alternatives. 

Along with selling or demerging its iconic De Beers brand, Anglo plans to divest its coal and platinum divisions to create a “radically simpler business,” it said Tuesday. Anglo will also curb spending on its underground mining project Woodsmith in the U.K., and lower overall annual costs by $1.7 billion. 

Would that make things easier? Probably not, according to AJ Bell investment analyst Dan Coatsworth. 

Streamlining its business “would effectively make Anglo American even more attractive to potential bidders as it would have slimmed down and got rid of a lot of the fat that someone like BHP wouldn’t want,” Coatsworth said in a note. 

Anglo’s copper, iron ore and fertilizer operations will remain front-and-center following the overhaul, but bids for the company have likely only just begun.  

“A takeover seems inevitable, whether it’s this year or over the next few years once the break-up has completed,” Coatsworth said. 

The ball is now back in BHP’s court, as it and other possible buyers consider whether they can make Anglo shareholders a more attractive offer.