Anglo American Plc acquires Sirius Minerals Plc

Anglo American Plc (LON:AAL) which is one of the largest mining companies in the world, has entered into an agreement to buy the United Kingdom company, Sirius Minerals Plc (LON:SXX) for £404.9 million. Through this acquisition, AAL has again come back to the fertiliser industry and creates an opportunity for around 85,000 retail investors who have endorsed SXX plan to excavate for potash on the North Yorkshire Moors. On this information, AAL stated that SXX shareholders would be required to vote on the recommended transaction at a general meeting.

As per the Media report, AAL chief executive Mark Cutifani stated that “The new project addition will support company’s current transition related to supplying important minerals and metals that will cater to the world’s evolving needs in terms of a definite requirement for cleaner transport and energy while providing infrastructure for the world’s urbanising and fast-growing population”.

In September 2019, SXX was allegedly pushed to revoke a $500 million issue bond after the UK Government denied help in supporting its potash mine in the North Yorkshire Moors. In the similar month of year 2019, the company declared that it was commencing a strategic assessment to evaluate the improvement strategy for the polyhalite Project in North Yorkshire. After that, in November 2019, SXX said that it was looking for $600 million to secure funding for the initial stage of the project and revealed optimisation & development strategies for two-stage project development.

The UK Government has been closely observing the misfortune of SXX very carefully as well as hoping that this acquisition is approved. If the project fails, then many of skilled vacancies in the North of England will be extinguished.

The AAL sold its remaining fertiliser project in the year 2016 due to market crash and has expanded its concentration on diamonds, iron ore, platinum and copper. However, through this acquisition, the North Yorkshire Moor project provides an enticing opportunity to the company.

Anglo American Plc

Anglo American Plc is a premier international mining company. Its products are essential ingredients in each area of modern-day life. The portfolio of undeveloped resources and mining operations provides minerals and metals which allow a cleaner, more electrified living world and that caters to the rapidly growing customer-focused requirements of the world’s maturing and developed economies. The company utilises modern-day technology geared to uncover new resources and mines as well as provides its products to customers around the world reliably, sustainably and safely.

 AAL - News Updates

On 21st January 2020, the company declared that it repurchased 10,968 shares of US$0.54945 each on 20th January 2020 from Goldman Sachs International as part of repurchase programme declared on 25th July 2019. The highest and lowest prices paid per shares were £22.46 and £22.34, respectively. The volume-weighted average price paid per share was £22.43.

On 17th January 2020, the company declared that it repurchased 6,786 shares of US$0.54945 each on 16th January 2020 from Goldman Sachs International as part of repurchase programme declared on 25th July 2019.

On 16th January 2020, the company declared that it repurchased 185,710 shares of US$0.54945 each on 15^th January 2020 from Goldman Sachs International as part of repurchase programme declared on 25th July 2019.

On 15th January 2020, the company declared that it repurchased 192,760 shares of US$0.54945 each on 14^th January 2020 from Goldman Sachs International as part of repurchase programme declared on 25th July 2019.

AAL – Share Price Performance

At the time of writing, On 21st January 2020 as at 09:18 GMT, the shares of AAL were trading at GBX 2,186.0 per share on the London Stock Exchange, a decline of 2.43 per cent or GBX 54.50 per share, versus previous day’s closing price of GBX 2,240.50 per share. The company’s market capitalisation was reported at £30,682.95 million at the time of writing. The free float and shares outstanding of the AAL were reported at 1.23 billion and 1.37 billion.

The AAL share price of GBX 2,294.0 was the 1-year peak price as on 01st July 2019, whereas the share price of GBX 1,654.80 was the 1-year low share price as on 23^rd August 2019. The current share price dropped by 4.7 per cent from the 1-year high price, whereas it increased by 32.1 per cent from the 1-year low price.

While writing, the beta of the AAL share was stated at 1.59, which shows higher volatility as compared to the benchmark market index’s movement.

 Sirius Minerals Plc

Sirius Mineral Plc is a resource development company which is based on the United Kingdom. The company is concentrating on the advancement of North Yorkshire Polyhalite project. The company’s POLY4 product can help to enhance yields and quality in a broad range of harvests to meet food security requirements of the world’s growing populations. The company’s vision is to become a world-class fertiliser company in the world. Its strategy is to build a world-class, long life and low-cost production facility as well as develop an industry-leading product while executing a financing plan which delivers an attractive return for investors.

SXX – Share Price Performance

At the time of writing, On 21st January 2020 as at 09:33 AM GMT, the shares of SXX were trading at GBX 5.53 per share on the London Stock Exchange, a decline of 0.18 per cent or GBX 0.010 per share, versus previous day’s closing price of GBX 5.54 per share. The company’s market capitalisation was reported at £388.92 million at the time of writing. The free float and share outstanding of the SXX were reported at 6.41 billion and 7.02 billion.

The SXX share price of GBX 26.84 was the 1-year peak price as on 09th April 2019, whereas the share price of GBX 2.10 was the 1-year low share price as on 17^th September 2019. The current share price dropped by 79.39 per cent from the 1-year highest price, whereas it increased by 163.33 per cent from the 1-year low price.

While writing, the beta of the SXX share was stated at 2.15, which shows very high volatility as compared to the benchmark market index’s movement.