Why the European Commission is blocking Anglo American’s MMG nickel deal worth $500m

Why is the European Commission probing Anglo American’s $500 million sale to MMG?

Anglo American plc (LSE: AAL) is facing a significant regulatory test as the European Commission prepares to open an in-depth antitrust investigation into its proposed sale of Brazilian nickel operations to MMG Limited (HKEX: 1208). The deal, valued at up to US$500 million, is now under scrutiny following the regulator’s rejection of the companies’ proposed remedy package aimed at addressing potential market supply concerns.

The investigation comes at a time when Europe is tightening oversight of mergers and acquisitions involving strategic minerals, especially those linked to Chinese-backed entities. Sources familiar with the matter told Reuters that the European Commission found Anglo American’s proposed 10-year supply agreement insufficient to guarantee stable ferronickel access for European buyers. The regulator now appears poised to move into a full-scale Phase II review unless more convincing assurances are provided before the November 4 decision deadline.

What is at stake for Anglo American’s restructuring strategy?

The sale of Anglo American’s nickel assets to MMG Limited is part of a sweeping restructuring designed to streamline its commodity portfolio, reduce exposure to volatile base metals, and concentrate on copper, iron ore, and fertilizer. The transaction involves the transfer of the Barro Alto and Codemin ferronickel mines in Brazil, alongside related development projects. Anglo American’s management sees this divestment as a step toward sharpening focus on high-margin growth sectors that better align with the energy transition.

However, if the European Commission launches a detailed probe, it could delay closing by several months and increase transaction costs. A prolonged regulatory process could weaken Anglo American’s balance-sheet efficiency and undermine investor confidence in its strategic turnaround. Market analysts have noted that the company’s stock performance has been under pressure since the announcement of global divestments, with shares hovering around £22 in late October, down more than 6% over the past month.

The EU review also underscores how regulatory risk is increasingly intertwined with corporate restructuring decisions in the mining sector. For Anglo American, this means balancing short-term divestment priorities with long-term market access to Europe — a region that still represents one of the world’s largest consumers of stainless steel-grade ferronickel.

Why is the European Commission concerned about the deal’s market impact?

At the core of the European Commission’s concern lies the issue of supply concentration and the potential influence of Chinese-backed companies over the critical minerals market. MMG Limited, majority-owned by China Minmetals Corporation, is seen by regulators as part of a growing trend of Chinese investments in strategic raw materials used in electric vehicles, stainless steel, and clean-energy manufacturing.

The Commission fears that if MMG gains control of Anglo American’s Brazilian nickel assets, it could indirectly strengthen China’s leverage over the global ferronickel value chain. Nickel is one of the EU’s designated “strategic raw materials” under the bloc’s 2023 Critical Raw Materials Act — legislation that aims to safeguard domestic industrial resilience by limiting supply dependence on non-EU players.

While Anglo American proposed a remedy in which it would purchase ferronickel from MMG for resale to European customers over a 10-year period, regulators reportedly viewed the measure as a temporary patch rather than a structural solution. The Commission has not yet sought formal input from European steelmakers or automotive manufacturers, a move that usually precedes a Phase II probe.

According to Brussels-based competition lawyers, the lack of early stakeholder consultation indicates that the regulator sees the remedy as insufficient and may require a more binding commitment or even partial divestment of European distribution rights to ensure fair competition.

How does the deal fit into the global nickel and EV materials landscape?

The timing of this regulatory intervention is notable. The global nickel market has been under severe stress, with prices falling sharply due to a supply glut from Indonesia and declining stainless steel demand in China. Many Western producers, including Anglo American, have scaled back operations or sought asset sales to reduce exposure to the metal’s volatility.

Anglo American’s decision to exit the nickel business mirrors similar moves by BHP Group and Vale S.A., both of which have signaled a shift away from lower-margin nickel projects. MMG, meanwhile, views the acquisition as a strategic expansion opportunity, giving it access to Latin America’s resource base and potentially diversifying beyond its heavy copper dependence.

Industry analysts see the EU’s probe as emblematic of a broader geopolitical recalibration. Europe’s critical-mineral strategy now places a premium on domestic refining, diversified sourcing, and transparent ownership. The MMG transaction — involving a Chinese-backed buyer acquiring assets that feed into Europe’s manufacturing ecosystem — cuts directly across those priorities.

How has the market reacted to the potential regulatory delay?

Investor sentiment toward Anglo American has turned cautiously negative since the news broke. Traders in London have expressed concerns that an EU Phase II probe could extend the approval timeline by six to nine months. Such a delay would defer cash proceeds expected from the sale, weakening near-term liquidity and potentially impacting dividend flexibility.

Institutional flows show that foreign institutional investors have modestly reduced exposure to Anglo American’s stock this quarter, shifting capital toward lower-risk miners such as Rio Tinto Group and Glencore plc. Analysts at several brokerages have maintained a “Hold” recommendation on Anglo American shares, citing regulatory uncertainty and subdued nickel market fundamentals as short-term headwinds.

For MMG Limited, listed in Hong Kong, the immediate share price impact has been muted, reflecting investor expectations that China’s state backing could help navigate regulatory resistance. However, prolonged scrutiny from European authorities may limit MMG’s access to downstream European customers, reducing the strategic upside of the acquisition.

What does this mean for global mining M&A trends?

The Anglo American–MMG case could set a precedent for how European regulators approach mining and metals mergers that involve Chinese ownership or control. Historically, Brussels has focused on consumer and industrial goods, but as the energy transition accelerates, resource security has become an economic and geopolitical priority.

If the European Commission takes this case to a full investigation, it will send a strong signal that even mid-tier commodity transactions will be evaluated under the same lens as large-scale technology or defense acquisitions. That could alter deal-making behavior across the sector, pushing mining companies to pre-consult with regulators earlier in the process and to consider joint ventures rather than outright divestments.

Experts also point out that this heightened scrutiny may drive Western miners to partner with regional buyers in Europe or the Americas instead of Chinese-affiliated companies. The result could be a more fragmented, but geopolitically balanced, global mining M&A environment.

What could happen next?

The European Commission has until November 4 to decide whether to clear the deal or escalate it into a deeper investigation. If it proceeds to Phase II, the review could last up to 90 working days. Anglo American and MMG are expected to submit additional remedies or commitments in the coming weeks to avoid such escalation.

A key determinant will be whether the Commission accepts structural guarantees — such as third-party supply access, pricing transparency clauses, or independent audits — to ensure that ferronickel shipments to Europe remain unaffected. Should those conditions be accepted, the deal could close in early 2026.

From an industry perspective, this case highlights the growing intersection between environmental, industrial, and competition policies. As governments race to secure clean-energy supply chains, mergers in the mining space are no longer viewed solely through economic efficiency metrics but through the prism of strategic autonomy and geopolitical influence.

What could this mean for investors and the nickel market?

Analysts say that even if the deal is ultimately approved, the episode has already introduced new uncertainty into global nickel valuations. Regulatory risks now form part of the broader price narrative, alongside Indonesia’s oversupply and weak EV battery demand. Anglo American’s ability to divest efficiently will be closely watched by institutional investors as a test of how well diversified miners can navigate political headwinds in critical-mineral markets.

If the deal stalls, Anglo American may need to retain the Brazilian assets longer than planned or seek alternative buyers outside the Chinese sphere of influence. That would add pressure to streamline operations elsewhere and could force a rethink of its divestment timetable. MMG, on the other hand, may double down on non-EU markets, redirecting ferronickel output toward Asia-Pacific buyers less constrained by regulatory oversight.

What are the key takeaways from the European Commission’s probe into Anglo American’s $500 million MMG nickel deal?

• The European Commission is preparing to open a Phase II probe into Anglo American’s US$500 million nickel asset sale to MMG Limited.

• Regulators rejected the proposed 10-year supply remedy, citing inadequate guarantees of ferronickel access for European customers.

• The deal’s fate will test Europe’s resolve in balancing market competition with strategic mineral independence.

• Anglo American faces short-term investor caution and potential restructuring delays if the probe drags on.

• The case underscores a broader trend: the weaponization of regulatory scrutiny in the global critical-minerals race.