Mining giant BHP Billiton has offered nearly $40 billion for its British rival Anglo American, which will be the largest ever in the mining industry.Pennconflict3The deal.

BHP said in a statement on Thursday that it valued Anglo American shares at 25 per share.Pennconflict3.08 pounds (31)Pennconflict3.4 U.S. dollars), totaling 31.1 billion pounds (38.9 billion U.S. dollars). BHP will increase access to copper reserves if the acquisition is completed, the company added.

Copper is an important part of some renewable energy technologies, including solar panels and electric vehicles, as well as the power grid. And the demand is strong.Pennconflict3Copper on the London Metal Exchange (London Metals Exchange) has risen more than 13 per cent this year to nearly $10, 000 a tonne, the highest level in about two years.

William Tankard, chief analyst at CRU Group Base Metals, said the "first and most important" proposed acquisition is about copper.

BHP Billiton is the world's largest copper producer, while Anglo American is the ninth-largest, according to GRU Group. Mr Tankard added that the merger of the two companies would be subject to scrutiny by global competition regulators.

The potential deal will be worth more than the $38.3 billion acquisition of Switzerland's Xstrata by Glencore, the commodities company, in 2012, according to Dealogic. It will also be the largest M & A deal in the mining industry since Dealogic began collecting data in 2004.

Anglo American said in a statement that its board was "currently reviewing the proposal", adding that it was "uncertain" whether BHP would make a formal offer or the terms of the potential offer.

BHP must make a formal offer by May 22.

Anglo shares soared 13.8 per cent on the news. By 10:20 et, it was trading at 25.10 pounds ($31.35). BHP shares closed down 0.6 per cent in Australia.

BHP has been seeking to increase its copper reserves for some time. A year ago, the Melbourne-based company bought Australian rival Oz Minerals to expand its copper and nickel supply channels.

Mike Henry, BHP's chief executive, said in a statement at the time that the acquisition of Oz was part of BHP's strategy to "meet the growing demand for key minerals needed by electric cars, wind turbines and solar panels".

Tankard of the CRU Group calls copper a "ubiquitous, future-oriented commodity". "whether we're talking about electric cars, data centers, or general electrification... They all have a common theme, and that is copper. "

Bad news from London?

Anglo American is one of the largest listed companies on the London Stock Exchange, and the acquisition of BHP Billiton is likely to add to fears of a large outflow from the London stock market.

Shell CEO Wael Sawan said last month that he thought the energy giant's London listing had made the company "undervalued" and compared it to New York-listed larger rivals ExxonMobil and Chevron.

That sparked speculation that the 186 billion pounds ($232 billion) oil giant might leave London for Wall Street, a shift that would deal a huge blow to Britain's main stock exchanges. In recent years, several companies have moved their main listing locations to other places, or directly chose to list in New York.

Suzanne Street, head of finance and marketing at Hargreaves Lansdown, Hargreaves, wrote in a report on Thursday that the Anglo American acquisition "will bring a new chill to the City of London". "there are concerns that if the deal succeeds, this may be just the tip of the iceberg, which means that more giants may leave the LSE."