DealBook: Anglo American Sells Chilean Stake for $5.39 Billion

Yonhap, via European Pressphoto AgencyCynthia Carroll, the chief executive of Anglo American.

LONDON — Anglo American has agreed to sell a 24.5 percent stake in its Chilean copper assets to the Mitsubishi Corporation for $5.39 billion, the largest mining acquisition ever by Japanese company.

The deal, which was outlined late on Wednesday, thwarts plans by Chile’s state-owned copper producer Codelco to exercise its option early next year to buy a 49 percent stake in Anglo American’s local operations, known as Anglo American Sur.

Under terms of the deal, Mitsubishi will acquire a stake of almost 25 percent in Anglo’s two mines and one copper smelter in Chile. The purchase will roughly double the Japanese company’s yearly copper output. Mitsubishi put up a promissory note for $5.39 billion, which is due on Nov. 10, Anglo American said in a statement.

The deal values Anglo American Sur’s total operations at $22 billion.

“Mitsubishi brings both its global reputation as an industrial powerhouse and extensive experience as an existing investor in Chile,” Anglo American’s chief executive, Cynthia Carroll, said in a statement. “The terms of the transaction completed with Mitsubishi highlight the inherent value of A.A.S. as a world class, tier one copper business with extensive reserves and resources and significant further growth options from its exploration discoveries.”

Markets reacted positively to the announcement. In early afternoon trading on Thursday in London, Anglo American’s share price had risen 2.8 percent.

The deal, however, will likely face opposition from Codelco. In a statement, the company said the agreement would not affect its plans to acquire a 49 percent stake in Anglo American Sur.

“Codelco will exercise all the means necessary to safeguard its rights,” the company added.

Last month, Codelco said it had reached an agreement with Mitsui Company of Japan to,provide up to $6.75 billion to finance the purchase of the 49 percent stake in Anglo American Sur

The squabble for control of the Chilean operations comes as global demand for copper, particularly from emerging markets, is forecast to rise by almost 50 percent over the next decade.

Anglo American Sur is well positioned to take advantage of this growing appetite for commodities. The subsidiary has access to proven and probable copper reserves of 2.4 billion metric tons, and a further 6.4 billion metric tons of additional resources. The business reported a pretax profit of $1.3 billion last year and gross assets of $4.9 billion.

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