Anglo-American targets BHP-Rio assets

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The Independent Online

Anglo American will remain on the sidelines of the current round of mega deal-making in the mining sector but wants to buy assets that BHP Billiton would be required to divest if its $147bn (£75.7bn) takeover of rival Rio Tinto succeeds.

“The synergies [of a large transaction] are not obvious and value creation opportunities are limited,” said Anglo's finance director Rene Medori, in an attempt to pour cold water on speculation that the company could jump into the consolidation wave by tabling a blockbuster offer for an industry heavyweight.

He also dismissed the rumour that Anglo had made an approach to Xstrata, which has rejected a bid from the Brazilian giant Vale, but said that the company would be interested in assets thrown off from a combined BHP-Rio. He said: “If there are assets that are available as a result of a regulatory approval process, we'd be very keen to look at these.”

Anglo also confirmed long-simmering speculation in the market yesterday by officially postponing the sale of its Tarmac subsidiary due to the poor credit markets. The company had announced its intention to divest the building materials unit in August, just as the global credit crunch was gaining steam. Analysts had expected the sale to generate about £3bn but several reports have since surfaced suggesting that Anglo had already shelved the plan. Standard & Poor's reacted to the news by lowering its rating of the company's credit from 'A/A-1' to 'A-/A-2'. The credit rating agency did so because it “believes that management has adopted a less conservative financial policy over the past year, which looks set to continue,” it said.

The company otherwise impressed the market by reporting an 18 per cent increase in group profits to $7.3bn for the year on the back of strong prices in platinum, copper, iron ore and zinc. The annual numbers were the first under chief executive Cynthia Carroll, who has divested non-core assets and bought stakes in several new projects around the world to more than double its project pipelines to more than $40bn. Among these, Ms Carroll is in talks with MMX of Brazil to take control of two major iron ore projects in Brazil.