By Clara Denina and Melanie Burton
LONDON/MELBOURNE (Reuters) - Anglo American (JO:AGLJ) agreed on Monday to sell its remaining Australian steelmaking coal mines to Peabody Energy for up to $3.78 billion in cash, the first major disposal in a wider restructuring plan.
The London-listed miner is reshaping its business to focus on copper after fending off a $49 billion takeover bid from larger rival BHP (ASX:BHP) in May, betting on disposals to increase value and ward off unwanted suitors.
Anglo's share price was up 2.4% by 0829 GMT.
Peabody's deal comprises an upfront payment of $2.05 billion at completion, deferred cash consideration of $725 million and the potential for up to $550 million. It also includes a contingent cash consideration of $450 million linked to the reopening of the Grosvenor mine after a fire broke out there in June, Anglo American said in a statement.
Portfolio manager Ben Cleary at Tribeca Investment Partners, whose firm counts Anglo as its largest holding said that the miner received a "good price".
"A decent amount of cash and the deferred element seems sensible," he added.
Peabody will buy Moranbah North, Grosvenor, Aquila, and Capcoal located in Australia's Bowen Basin. Anglo's Dawson mine will be sold on for $455 million to a unit of Indonesia's Delta Dunia Group which runs the BUMA coal mining services business, in a back-to-back transaction, Peabody said.
The agreement comes just days before a six-month freeze on another approach by BHP expires on Friday under UK takeover regulations, after Anglo rebuffed BHP three times.
Anglo had already offloaded a minority stake in a joint venture that owns the Jellinbah East and Lake Vermont steelmaking coal mines in Australia, for $1.1 billion.
SPINNING OUT UNDERPERFORMING ASSETS
Anglo's plan to restructure also includes shedding underperforming platinum, nickel and diamond assets to focus on copper, a metal key for the clean energy transition and the rapid expansion of artificial intelligence, iron ore and crop nutrients.
"We see potential for a material re-rating in the medium-term as Anglo delivers on its restructuring plan, leaving a simplified portfolio with a 60% exposure to copper," said Marina Calero, an analyst at RBC Capital Markets.
"A renewed approach from BHP cannot be ruled out, with the end November deadline soon approaching," she added.
After coal, Anglo is expected to spin out its Anglo American Platinum unit in South Africa by mid-2025. CEO Duncan Wanblad also said it expects diamond giant De Beers to follow, as the group works towards separation of that business.
"We are well progressed with the delivery of $1 billion of cost savings," he said in a press release.