FirstFT: BHP proposes all-stock takeover of Anglo American

Good morning. We start today with a proposed deal that could bring together two of the world’s largest mining companies.

BHP, the world’s biggest mining group with a market capitalisation of A$229bn (US$149bn), is seeking to use an all-stock takeover of Anglo American to expand its portfolio of copper mines, according to people familiar with the matter.

The approach for 107-year-old Anglo comes as demand for copper is expected to soar because of a global transition away from fossil fuels. The metal is heavily used in renewable energy projects and electric vehicles.

Anglo owns some of the sector’s most coveted copper mines in Peru and Chile, but chief executive Duncan Wanblad has come under intense pressure since December, when the company revealed big downgrades to its production forecasts. Here’s more on what could be one of the industry’s largest transactions in years.

And here’s what else I’m keeping tabs on today:

• Earnings: Microsoft and Google owner Alphabet are the latest tech companies to report results. Earnings are also expected from Merck, Caterpillar, Honeywell, Bristol Myers Squibb, Altria, Northrop Grumman, Royal Caribbean Cruises, Southwest Airlines, American Airlines, Harley-Davidson and Hertz before the bell. Intel, Capital One and Snap report after the bell. 

• Economic data: US first-quarter growth is expected to slow from the fourth quarter of 2023 and new applications for unemployment aid are expected to have edged higher.

• Donald Trump: The US Supreme Court will hear oral arguments to determine whether former president Donald Trump is immune from criminal charges for actions taken while in the White House.

Five more top stories

1. Meta’s shares tumbled more than 15 per cent in after-hours trading, wiping billions of dollars off the value of the social media group, after Mark Zuckerberg vowed to turn it into “the leading AI company in the world”. The chief executive’s remarks rekindled investor memories of the billions spent by the company on the metaverse which was later cut back. Here’s more on yesterday’s results.

• Lex: Even with billions of dollars pouring in it is still not clear what sort of AI company Meta is building, writes the FT’s investment column (premium content).

• AI and jobs: Call centres could soon be replaced by AI with chatbots, making the need for human agents “minimal” within the year, the chief of Tata Consultancy Services told the Financial Times.

2. China has warned the US that Washington and Beijing must choose between “confrontation or co-operation” as secretary of state Antony Blinken began an official visit during which he is expected to deliver an ultimatum over the war in Ukraine. Tensions are running high over US accusations that China is supporting Russia’s military industrial machine in Ukraine. Read more on Blinken’s talks with the powerful Shanghai Communist party boss.

• More on Ukraine: It is set to increase long-range attacks inside Russia as an influx of western military aid aims to help Kyiv shape the war “in much stronger ways”, Britain’s defence chief has said.

• US aid: The Pentagon is rushing $1bn in new weapons to Ukraine from US stockpiles after President Joe Biden signed a highly anticipated aid bill yesterday.

3. Computer-driven hedge funds that bet on trends in financial markets are enjoying strong returns as bets on soaring cocoa prices and a sinking Japanese yen have borne fruit. Quantitative funds have gained 12 per cent for the year to the end of March, according to an index compiled by Société Générale. Read more on those funds that are profiting.

• More on the yen: Investors are increasing their bets that the Bank of Japan will need to keep raising borrowing costs as a weaker yen fuels inflation and puts pressure on the central bank to tighten its policy to prop up the currency.

4. Europe is less hard-working, less ambitious, more regulated and more risk-averse than the US, according to the boss of Norway’s giant oil fund. The $1.6tn fund’s chief executive told the FT it was “worrisome” that American companies were outpacing their European rivals on innovation and technology, leading to vast outperformance of US shares in the past decade. Read the full interview with Nicolai Tangen.

5. Jefferies chief executive Rich Handler has sold $65mn of his stock in the Wall Street investment bank to buy a luxury yacht from longtime client Tilman Fertitta. Handler yesterday said that he had sold 1.5mn shares or about 7 per cent of his total holdings in Jefferies. It is the first time Handler has sold shares in the bank where he started his career 34 years ago other than for charitable or tax purposes. Read more on the yacht and Fertitta.

Today’s big read

The week-old “Gaza Solidarity Encampment” at Columbia University has reconnected a new generation of student activists to predecessors who made the university a centre of protest against the Vietnam war and energised similar protests on campuses across the country. But it has also plunged Columbia into a crisis over the bounds of free speech and harassment and tarnished the school in the eyes of many Jewish alumni as a hotbed of antisemitism. President Minouche Shafik is coming under increasing pressure to follow her peers at Harvard and the University of Pennsylvania and resign.

We’re also reading . . . 

• TikTok: Insiders at the viral video app say there is a growing culture clash between its Chinese owners and their American staff.

• Israel-Hamas war: After six months of gruelling conflict with the Jewish state, dissent from Palestinians in Gaza against Hamas is rising.

• EU green colonialism: What looks like progressive principle in Europe can come across as hypocritical coercion to middle-income countries on the receiving end, writes Alan Beattie.

Chart of the day

Boeing has been building fewer 737 Maxes this year after a door panel blew out from one of its planes during an Alaska Airlines flight in January and airlines have been counting the cost. But now industry analysts warn the delays combined with strong demand for air travel could lead to higher fares.

Take a break from the news

Meet Tokyo’s top female sushi chefs, who are expertly challenging convention in a male-dominated profession. Kana Inagaki profiles the women who have broken through the glass ceiling and mastered the art of making delicious sushi.

Additional contributions from Tee Zhuo and Benjamin Wilhelm