Glencore plc (LSE:GLEN) entered into an agreement to acquire the remaining 66.6% stake in Cerrejón mine in Colombia from Anglo American plc (LSE:AAL) and BHP Group Plc for approximately $590 million on June 28, 2021. Anglo American plc is selling 33.3% stake in Cerrejón mine in Colombia for cash consideration of approximately $294 million and BHP Group Plc is selling 33.3% stake in Cerrejón mine in Colombia for $294 million. Glencore intends to acquire both Anglo American's and BHP's interests and will thereby assume full ownership of Cerrejón upon completion.

The transaction has an economic effective date of December 31, 2020, with an aggregate purchase consideration of cash $588 million then being subject to purchase price adjustments calculated at closing which may include an adjustment for any dividends paid by Cerrejón to BHP during the period from signing to completion. Based on expected operating performance and current forward coal prices, assuming a closing during H1 2022, we anticipate the cash generated by the operation to reduce the effective aggregate cash consideration to approximately $230 million, making the estimated investment payback period less than 2 years from closing. Cerrejón mine reported gross assets of $2.968 billion, revenue of $1 billion and earnings from continuing operations of ($182) million for December 31, 2020.

The transaction is subject to a number of competition authority and other regulatory approvals and is expected to complete in H1 2022. As per the article of July 6, 2021, Glencore plc completed the acquisition of 33.3% stake in Cerrejón mine in Colombia from BHP Group Plc recently. Daniel Senior of Shearman & Sterling LLP and LLOREDA CAMACHO & CIA S.A.S acted as legal advisors to Anglo American plc.

David Johnson, Harry Hecht, Jordan Ellison and Mike Lane of Slaughter and May acted as a legal advisor to BHP Group. JPMorgan advised on the deal. The Goldman Sachs Group acted as financial advisor to BHP Group.