Global M&A Deal of the Year, Chile: The Anglo American Sur sales
Honorees: Cleary Gottlieb Steen & Hamilton, Codelco, Debevoise & Plimpton, Mitsui, Shearman & Sterling, Anglo-American plc, Clifford Chance, Mitsubishi, Carey y Cia, Claro y Cia, Barros & Errázuriz Abogados, Bofill Mir y Alvarez Jana Abogados, Morales y Besa, Guerrero, Olivos, Novoa y Errázuriz
For most of its history, the Los Bronces mine, 3,200 meters (10,500 feet) above sea level in the Chilean Andes, was known for its site, a place so altitudinous that normal reaction times are slowed or impaired. But for 10 months last year it took on a new name, “La Disputada, ” and a new fame as the subject of a bruising struggle between two powerful players seeking to dominate Chile’s copper supply.
Los Bronces was part of a portfolio of copper holdings known as “Anglo Sur,” owned by Anglo American, one of the world’s mining giants. The dispute arose after the Chilean state-owned Corporación Nacional del Cobre de Chile (Codelco), the world’s largest copper producer, announced its intention to exercise an option to purchase a 49 percent stake in Anglo Sur—and obtained a $6.75 billion loan from Mitsui that gave it the muscle to do so.
Subsequently Anglo sold a 24.5 percent stake in Anglo Sur to Mitsubishi, which, it said, secured better value than would the exercise of the Codelco option. Disputes over a number of assets ensued between Anglo American and Codelco, and world copper markets faced the prospect of a disruptive and drawn-out tussle between Anglo American and its state-owned rival.
Then, on August 23, 2012, the day before an agreed deadline for a solution, the two companies cut a deal. Under the terms of the agreement, Anglo American sold a 24.5 percent stake in its Chilean copper holdings (Anglo American Sur, or “AA Sur”) to its erstwhile rival Codelco (and backer Mitsui) for $1.7 billion.
On the same day, Anglo American completed the acquisition of a 4.1 percent stake in AA Sur from another shareholder, Mitsubishi, for $890 million cash, then agreed to sell it to the Codelco/Mitsui joint venture.
Was everyone a winner? Analysts praised Anglo American for delivering value to shareholders, while Codelco takes a slice of the AA Sur pie (if less than that demanded by unions), and both parties are now reported to be discussing synergies between their respective holdings.
We honor the law firms involved for the rapidity of their action times and ability to turn a protracted dispute into a deal in which both sides gained. Cleary acted for Codelco in the deal with Anglo American, and also in its partnerships with Mitsui and Mitsubishi Corporation. Shearman and Sterling represented Anglo American, both in the sale of a stake to Mitsubishi, and in its negotiations with Codelco. We also honor Debevoise & Plimpton, representing Mitsui, and a number of firms advising on aspects of Chilean law.