More than 96 per cent. That was the share of proxy votes cast in favour when BHP shareholders met on a Thursday night in January 2022 and agreed to end a corporate split that had lasted two decades.
The split dated to 2001, when BHP merged with Billiton and the combined group was built around a dual-listed structure, with separate parent companies in Australia and the United Kingdom. In those days about 40 per cent of earnings flowed through the UK entity. After years of portfolio changes, that contribution had dropped below 5 per cent.
2015: a smaller company
The first big reshaping came in 2015. Shareholders backed a demerger that put BHP’s nickel, alumina, aluminium, manganese and some coal mines into a new company, South32. ABC News reported that holders would receive one South32 share for every BHP share they owned and keep getting dividends from both.
BHP argued that the world’s biggest diversified miner would be simpler. What remained was a group centred on four “pillars”: iron ore, copper, coal and petroleum, with potash held as a fifth, future option. Chief executive Andrew Mackenzie said the company was now “simplified into twelve assets that we operate” and that the two companies could each improve efficiency faster apart. South32’s chief executive, Graham Kerr, said his firm inherited a “strong balance sheet” and assets that were “cash competitive through the cycle.”
2022: coming home
The second step went after the structure itself. Chairman Ken MacKenzie put the case in plain terms: “We value simplicity. And having two parent companies listed in two locations is complex.” The dual-listed model had done its job for a long time, he said, but it no longer fit. “We are not the same group we were in 2001.”
The vote cleared the way for BHP to move its primary listing to the Australian Securities Exchange. That would lift it above the Commonwealth Bank as the biggest company on the Australian market by value, and it would take one of its largest members out of London’s FTSE index. The Sydney Morning Herald reported that unification was expected to be completed by January 31, with secondary listings kept in London, Johannesburg and New York.
It followed a run of changes under chief executive Mike Henry, who took the top job at the start of 2020. He had struck deals to sell off BHP’s oil and gas assets and many of its coal mines, freeing up cash for what the paper called “future-facing” commodities such as copper and nickel.
Sources
- BHP shareholders vote for demerger to create South32 – ABC News
- BHP unification: Australian, UK investors back miner's big move home – The Sydney Morning Herald
