BHP (ASX: BHP), the world's largest mining company, will stop trading on the London Stock Exchange next week after Australian and UK investors approved plans to simplify the group's structure and list its shares only in Sydney.
At Thursday's special meeting, more than 96 per cent of BHP shareholders voted for unification, the company said.
The move is one of a series of key changes launched by CEO Mike Henry since he took the top job in early 2020.
The conservative Canadian sold two of BHP's long-term coal assets, pledged to invest $5.7 billion in Jansen, the company's first potash mine, and announced the end of the company's six-year involvement in the oil and gas industry.
Henry has also made progress in repairing the reputation of BHP, which has been affected by events such as the deadly Samarco disaster and high-profile tax disputes.
Delisting from London would end a 20-year arrangement that allows an Australian company and a UK company to operate as a single company, sharing all assets, profits and dividends.
With a market capitalization of 126 billion pounds ($172 billion), BHP is currently the third-largest company in the FTSE 100th index, which tracks the top 100 companies listed on the London Stock Exchange, after Shell and AstraZeneca.
"Today, BHP's portfolio is simpler, focusing on adding long-term value from future-oriented commodities," Ken Mackenzie, chairman, told the meeting. "and we need a corporate structure that supports that-that's in line with the purpose."
MacKenzie said the dual listing structure was built for the merger of BHP Billiton and Billiton in 2001 and has served the company well for many years. But the board and management believe that its applicability has diminished over time.
"We are different from what we were in 2001," he said, adding that the deal would cost $350 million to $450 million to complete. By contrast, the cost will exceed $1 billion when activist investor Elliott Management urges BHP to unify in 2017.
When the dual listing structure was first established in 2001, about 40 per cent of BHP's revenue came from UK entities. However, with a series of changes in the portfolio over the years, this contribution has fallen below 5 per cent.
Henry said the move could also create a smoother way for the sale of BHP's oil division to Woodside.
British investors were hit when the company said in August 2021 that it wanted to abandon its dual listing and return to a single major listing in the country.
"the consolidation of shares will simplify BHP's structure, make it easier for the company to make equity-based acquisitions and make it easier for other companies to restructure, including an oil merger with Woodside." Jeffery analysts said at the time.
The company's shares in London are traditionally traded at much lower prices than Australian shares.
UK investors, including Legal & General, expressed concern because the reforms would mean that BHP Billiton would withdraw from the FTSE index, forcing passive investors and other investors based on these indices to sell their shares.
BHP will retain secondary listings in London, Johannesburg and New York.
