Mining giant BHP has confirmed it will not proceed with a firm offer to acquire Anglo American, following the rejection of its £39bn takeover proposal.

Last month, BHP initially made an unsolicited, non-binding all-share buyout offer to Anglo American.

The proposal called for separate demergers, which required Anglo American to distribute to shareholders its interests in South Africa’s Anglo American Platinum and Kumba Iron Ore.

BHP later sweetened its bid, which was also declined by the Anglo American board.

BHP opined that its offer would provide immediate value to Anglo American shareholders, helping them capitalise on the long-term value created from the consolidation of the mining giants.

Despite the potential benefits outlined by BHP, Anglo American's board declined the offer citing its complex structure and execution risks.

Anglo American said that the inter-conditional trait of the two demergers of publicly listed companies and a buyout is ‘unprecedented’. 

The miner stated: “The approvals required in relation to the BHP proposal would be likely to result in material conditions being imposed that would disproportionately impact the value of Anglo American Platinum and Kumba and, therefore, the value delivered to Anglo American's shareholders.”

Expressing disappointment at the abandonment, BHP CEO Mike Henry said despite looking to engage with Anglo American and even after multiple requests, it was unable to get hold of information needed to devise actions to address the perceived risk related to the takeover.

He also said that Anglo American and BHP failed to enter an agreement on South African regulatory risk and costs.

Henry added: “We remain of the view that our proposal was the most effective structure to deliver value for Anglo American shareholders, and we are confident that, working together with Anglo American, we could have obtained all required regulatory approvals, including in South Africa."