Anglo American, a mining company based in the UK, has been approached by its rival BHP for a potential takeover valued at £31 billion.
The proposal is currently under review by Anglo American's board of directors.
BHP has confirmed the proposal, stating that it would provide access to Anglo American's high-quality copper assets. If the deal goes through, it would be one of the largest mergers in the mining industry in recent years.
Anglo American operates mines in various countries, including Chile, South Africa, Brazil, and Australia, and had a stock market value of around £29bn before the public announcement of the approach. BHP, based in Australia, is the world's largest publicly listed mining company with a market valuation of about A$229bn (£119.5bn). This move comes after BHP's acquisition of copper producer Oz Minerals for A$9.6bn last year.
"If finalized, the deal would enhance BHP's access to copper through Anglo American's operations in South America.
The price of copper has increased by over 15% this year due to high demand as the transition to clean energy gains momentum.
The attractiveness of Anglo American's existing presence in the copper industry is a key factor that drew the interest of a major mining company like BHP.
The share price of Anglo American had declined by almost 10% in the past year, potentially making it an even more appealing takeover target. Susannah Streeter from investment platform Hargreaves Lansdown expressed concerns about BHP's takeover plan and its potential impact on the London Stock Exchange, where Anglo American is listed.
The news caused Anglo American's share price to surge by more than 12% in early trading on Thursday.
BHP's proposal remains subject to further developments.