PERTH (miningweekly.com) – The board of diversified major BHP has voted to proceed with the decision to unify the company’s corporate structure under its existing Australian parent company, BHP Group.
BHP currently operates under a dual-listed company (DLC) corporate structure, which was established at the time of the BHP and Billiton merger in 2001.
The DLC structure comprises two parent companies; BHP Group Limited in Australia and BHP Group Plc in the UK, with separate stock exchange listings and separate share registers. The two groups operate as a unified economic entity with a common board and management, and shares in Limited and Plc carry equivalent voting and economic rights.
The company told shareholders on Thursday that the unification was in the best interests of BHP shareholders, and would result in a corporate structure that is simpler and more efficient, reduces duplication and streamlines BHP’s governance and internal processes.
A unified structure will also improve flexibility for portfolio reshaping to maximise shareholder value over the long term, including facilitating a simpler separation of the petroleum business.
“BHP is in great shape and now is the right time to make strategic, transformative changes for the future. Unification will create one parent company, one share register and one share price globally. We believe this is the best structure for BHP to provide the resources the world needs and create long-term shareholder value,” said chairperson Ken MacKenzie.
To effect unification, Plc shareholders' shares will be exchanged for Limited shares on a one-for-one basis, resulting in Limited becoming the sole parent company of the BHP Group. There will be no change to the respective shareholdings of each Limited shareholder nor to the proportionate interest of each shareholder in the unified BHP Group.
BHP will have its primary listing on the ASX, a standard listing on the London Stock Exchange, a secondary listing on the Johannesburg Stock Exchange, and a sponsored Level II American Depositary Receipt program on the New York Stock Exchange.
The company said that its global investor base would continue to be able to invest in BHP on the same securities exchanges as prior to unification.
A shareholder circular and a prospectus are expected to be published on December 8, which will contain further information on unification and the Limited shares, including details of the proposed UK scheme of arrangement to effect unification, an independent expert’s report on whether unification is in the best interests of BHP shareholders, and the notices of shareholder meetings of BHP Group Limited and BHP Group Plc, which are expected to take place on January 20, 2022.
Unification is expected to complete by the end of January 2022 subject to approval by the shareholders of both BHP Group Limited and BHP Group Plc, receipt of remaining regulatory approvals and UK Court sanction of the scheme.
“A unified corporate structure will make BHP simpler and more agile, with the strategic flexibility required to shape our portfolio to deliver value through producing the commodities needed for continued economic growth, improved living standards, electrification and decarbonisation,” said CEO Mike Henry.
“We will retain listings in the UK, US, South Africa and Australia, providing BHP with continued access to global markets and giving shareholders the opportunity to benefit from our portfolio, management and operating performance for long-term value.”