BHP (ASX:BHP) share price lifts as single listing gets green light

BHP hopes to switch from a dual-listed corporate structure to a single ASX listing by January 31.

| More on:
A traffic light with the green light flashing representing the BHP board moving forward with unification of corporate structure

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The BHP Group Ltd (ASX: BHP) share price is heading higher in early trade, up 1.76% to $40.41.

This comes as the S&P/ASX 200 Index (ASX: XJO) mining giant moves forward with plans to unify its 2 companies into a single listing on the Aussie exchange.

BHP share price lifts on unification plans

The BHP share price is on the rise after the miner's board of directors said it is moving forward with unifying the company's corporate structure under its existing Australian parent company, BHP Group Limited.

As you may be aware, BHP has been operating under what's known as a dual-listed company (DLC) corporate structure. The DLC came into being when BHP and Billiton merged in 2001.

This formed 2 parent companies, BHP Group Limited in Australia trading on the ASX and BHP Group Plc in the United Kingdom trading on the London Stock Exchange. Both companies operate under the same board of directors and management. Their shares carry the same voting and economic rights.

BHP first reported its intent to unify its corporate structure back on 17 August. The BHP share price has dropped by 21% since then.

In a release this morning, the board said it "believes unification is in the best interests of BHP shareholders".

The company plans to publish a Shareholder Circular and a Prospectus with additional information next Wednesday 8 December.

Subject to shareholder and certain regulatory approvals, BHP expects to complete the unification by 31 January 2021.

What did management say?

Commenting on the unification, BHP's chair, Ken MacKenzie said:

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.

BHP's CEO, Mike Henry added:

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.

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.

BHP share price snapshot

The BHP share price has been under pressure amid declining the iron ore price, with shares down 6% year-to-date. That compares to a gain of 8% posted by the ASX 200.

Over the past month, BHP shares are up 12%.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

A woman holds up her hand in a stop gesture with a suspicious look on her face as a man sitting across from her at a cafe table offers her flowers.
Mergers & Acquisitions

BHP share price tumbles as $74 billion deal evaporates

BHP shares won’t be encompassing Anglo American’s copper assets after all.

Read more »

Miner looking at a tablet.
Mergers & Acquisitions

Should you buy BHP shares now before tonight's Anglo American takeover reveal?

ASX 200 investors should know tomorrow morning whether BHP will become the largest copper miner on Earth.

Read more »

Two young male miners wearing red hardhats stand inside a mine and shake hands
Resources Shares

Will ASX copper shares keep surging from here? (Plus: 2 top picks for exposure)

Can copper stocks continue their electric returns?

Read more »

Three miners looking at a tablet.
Mergers & Acquisitions

BHP share price marching higher amid fast approaching $75 billion takeover deadline

BHP is still in negotiations over its acquisition proposal for Anglo American.

Read more »

A happy miner pointing.
Resources Shares

1 Australian mining stock worth a long-term investment

I think this copper play could be an excellent pick in the mining sector.

Read more »

two business men sit across from each other at a negotiating table. with a large window in the background.
Mergers & Acquisitions

Deal or no deal? Why the BHP share price is crumbling today

The BHP share price is under pressure following the mining giant's third takeover bid for Anglo American.

Read more »

ASX shares downgrade A young woman with tattoos puts both thumbs down and scrunches her face with the bad news.
Resources Shares

Guess which ASX 200 mining giant could crash 30%

Goldman thinks this miner's shares could be seriously overvalued.

Read more »

Three analysts look at tech options on a wall screen
Resources Shares

Own Fortescue shares? Here's why you now own an ASX tech stock!

The mining giant is now selling software.

Read more »