BHP board gives green light to corporate structure unification plan

BHP Group’s Board of Directors has approved a proposal to unify its corporate structure under the Australian parent company to simplify and optimize business operations.

BHP currently operates as a dual listed company with two parent entities, which hold primary listings. These parent entities are BHP Group Limited in Australia (BHP Ltd) and BHP Group Plc (BHP Plc) in the United Kingdom.

The latest decision is to abandon the current dual-listing structure and exit the FTSE 100 index.

BHP’s dual listing deal is the result of its merger with Britain’s Billiton in 2001.

Under the new proposal, BHP will have a single corporate structure under BHP Ltd with a primary listing on the ASX.

The company will also have a standard listing on the London Stock Exchange (LSE), a secondary listing on the Johannesburg Stock Exchange (JSE) and a sponsored Level II American Depositary Receipt program on the New York Stock Exchange (NYSE).

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BHP initially disclosed its intention to unify its corporate structure on August 17, 2021 following a review of the DLC structure.

The move was prompted by the lower profit contribution from UK assets and reduced unification spending.

BHP expects the unification to reduce duplication while streamlining its governance and internal processes.

BHP CEO Mike Henry said, “A unified corporate structure will make BHP simpler and more agile, with the strategic flexibility to shape our portfolio to create value by producing the raw materials needed to continue from economic growth, to improved living standards, to electrification and decarbonization.

“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 performance and operating for long-term value.”

Scheduled to be completed by January 31, 2022, the proposal is now awaiting a green light from shareholders and regulators as well as a sanction from the UK court.

BHP Chairman Ken MacKenzie said, “BHP is in great shape and the time is right to make strategic and transformative changes for the future. The unification will create a global parent company, share register and share price.

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