Australia's biggest takeover bids never came to fruition
The merger talks between Rio Tinto & Glencore failed after both sides could not resolve their differences on valuation. This ended months of negotiations about a tie up that would have created?the world's largest mining firm with a value market exceeding $200 billion.
The following is a list containing some of the biggest failed mergers and purchases involving Australian companies in the last three years.
RIO TINTO - GLENCORE
After months of discussions, the takeover talks between mining giant Rio Tinto and Glencore came to an end. This ended a deal that could have transformed the global mining industry.
The third round of discussions on a possible combination and the second to fail in less than a year ended with nothing.
Glencore stated that the proposed terms, which included Rio Tinto's leadership retention and ownership structure, significantly undervalued Glencore's contributions.
Rio Tinto stated in a statement that it had concluded that it was unable to reach an agreement which would provide value for its investors.
The terms that were rejected and proposed by the companies are not revealed.
ADNOC-SANTOS
A consortium led by Abu Dhabi ADNOC has withdrawn its bid of $18.7bn for Australia's Santos after commercial terms couldn't be agreed.
XRG (ADNOC's overseas division) pulled the offer, stating that "a combination of factors, when taken together, has impacted the Consortium’s assessment of the indicative offer."
Santos claimed that the consortium refused to accept a fair risk sharing, which included taking responsibility for securing regulatory approvals as well as committing to gas supply and development in domestic markets.
In June, the XRG consortium offered $5.76 per share. That was?A$8.89. Santos last traded ?at A$6.74.
BHP-ANGLO AMERICAN
BHP Group of Australia, the largest mining company in the world, has withdrawn from its $49 billion offer to buy rival Anglo American by May 2024, after being rejected three times.
Anglo's collapse was due to the structure of BHP’s deal. It required Anglo to separate its South African iron ore and platinum businesses.
BHP's bid values Anglo shares at 29,34 pounds. Anglo American's last trading price was 25.18 pounds.
WOODSIDE-SANTOS
Woodside Energy, a smaller Australian rival company, and Santos, a larger competitor in the oil and gas industry ended their talks early 2024 about creating a global oil and natural gas giant worth up to A$80 billion (53.15 billion dollars).
Sources claim that the talks failed because the two companies couldn't agree on the valuation level.
BROOKFIELD ORIGIN ENERGY
Brookfield, a Canadian investment firm, and MidOcean Energy, an Australian power retailer, failed to win the $10.6 billion bid for Origin Energy in 2023 after only 69% shareholders voted for the deal. This was below the 75% threshold.
Brookfield was offering A$9.53 per share. Origin's last price was A$12.41.
ALBEMARLE LIONTOWN RESOURCES
Albemarle, a U.S. miner, backed out of a buyout offer for Australian lithium developer?Resources Liontown in 2023 due to "growing complexity" surrounding the transaction.
Albemarle offered A$3 per share. Liontown's last share price was 91 Australian cents.
KKR RAMSAY HEALTHCARE
After talks stalled, a group led by the private equity firm KKR & Co retracted a bid of nearly $13 billion for Australian hospital operator Ramsay?Care 2022.
Ramsay claimed that the KKR Group had cited a company's poor business performance when deciding to not sweeten the offer.
According to sources, KKR was unable to access the accounts of Ramsay Sante's European division to perform due diligence.
KKR offered A$88 per share. Ramsay's last trade was at A$32.95.
(source: Reuters)
