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would see one of the Rainbow Nation’s most familiar companies largely withdraw from the country more than a hundred years after it was founded. The question is whether the government in Pretoria can stop the $39 billion transaction – and whether it should.In reality, Pretoria has a host of reasons to be awkward. South African mining is in decline: as a contribution of GDP it has fallen from 21% in 1980 to 7.5% in 2022.
The government also has the means to do so, even though the country’s Public Investment Corporation owns only 7% of Anglo. South Africa’s Competition Commission must approve all mergers and demergers and can use controversial “public interest” powers to nix a transaction even if it lacks antitrust grounds.
There’s a smarter way for Ramaphosa to play the situation. Anglo has long suffered from a stock market discount due to its South African roots: breaking up the company could unlock at least $10 billion more than the $39 billion equity value implied by Henry’s approach, a Breakingviews sum of the parts suggests. Shareholders may therefore resist BHP’s current proposal.
South Africa could also use the threat of its own veto to extract concessions from BHP. Even though the Competition Commission ultimately waved through previous international swoops on local assets, like brewer Anheuser-Busch InBev’s $106 billion acquisition of SABMiller in 2016, it only did so after receiving promises on jobs, local production, long-term commitments to South Africa and payments to the farming sector.
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