FTSE 100 mining giant Anglo American has revealed plans to break itself up, hours after it rejected a takeover bid from a larger rival.
Anglo said it would sell or demerge its 85% stake in De Beers – the world’s biggest diamond miner.
The company also planned to sell its thermal coal assets and will demerge its shareholding in Johannesburg-listed Anglo American Platinum, known as Amplats.
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Anglo said it would focus in future on its copper, iron ore and crop nutrient assets.
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However, it warned that job losses were possible amid plans to slow work on the Moorside mineral fertiliser mining project in North Yorkshire.
The announcement was made a day after Anglo rejected the raised offer from Australian-based BHP.
Anglo said the £34bn bid continued to significantly undervalue the company and was “highly unattractive” for its shareholders.
The firm argued that its new plan would lower annual costs by $1.7bn.
Chief executive Duncan Wanbled told investors: “We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction.”
Anglo shares were trading more than 2.5% down in the wake of the announcement, suggesting shareholders were not won over on the company’s roadmap.
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It has been in widespread discussions with investors since BHP’s initial approach in April.
They followed a review of all of its assets in February in response to a 94% plunge in annual profit and writedowns at its diamond and nickel operations.
AJ Bell investment director Russ Mould said of the situation: “The plan has been greeted with a shrug by the market and it raises a troubling question for the incumbent management: why has it taken a takeover approach to prompt this radical action if it’s the right strategy for the future?”
