(Bloomberg) — BHP Group Ltd. proposed a takeover of Anglo American Plc that valued the smaller miner at £31.1 billion ($38.9 billion), in a deal that would create the world’s top copper producer while sparking the industry’s biggest shakeup in over a decade.

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BHP, already the largest miner, proposed an all-share deal in which Anglo would first spin off controlling stakes in South African platinum and iron ore companies to its shareholders before being acquired by BHP. The total per-share value of the non-binding proposal was about £25.08, BHP said.

A tie-up with Anglo would give BHP roughly 10% of global copper mine supply ahead of an expected shortage that many market watchers have predicted will send prices soaring. If successful, the transaction would mark a return to large-scale dealmaking for BHP, while potentially flushing out other suitors aiming to boost their exposure to the metal that’s closely linked to the global energy transition.

Read: Anglo American Share Price Shows Traders Envisage Sweeter Bid

Anglo shares jumped 14% in London on Thursday to £25.07 apiece, for a market value of £30.7 billion. The company said in a statement late Wednesday that its board was reviewing the proposal, which it confirmed after Bloomberg first reported BHP’s interest. BHP, which has a value of about $146 billion, fell 2.6%.

Anglo American has long been viewed as a potential target among the largest miners, particularly because it owns attractive South American copper operations at a time when most of the industry is eager to add reserves and production. However, suitors have been put off by its complicated structure and mix of other commodities from platinum to diamonds, and especially its deep exposure to South Africa.

Read: Anglo Must Push BHP Right Up to the Pain Barrier: Chris Hughes

Anglo has faced a series of major setbacks over the past year as prices for some of its key products plunged, while operational difficulties have forced the company to slash its production targets — driving down its valuation and leaving the company vulnerable to potential bidders.

Read: Anglo American Posts Steep Profit Fall and Lowers Dividend

Still, analysts suggested that BHP may need to raise its offer — Anglo shares were trading above £30 early last year.

“We would be surprised if this is BHP’s final offer,” analysts from Jefferies LLC led by Christopher LaFemina said in an emailed note. “We estimate that a price of at least £28/sh would be necessary for serious discussions to take place, and a takeout price of well above £30 per share would be the outcome if other bidders were to get involved.”

A successful takeover would represent the first mega deal among the world’s biggest diversified miners in more than a decade. BHP and its rivals spent years on the sidelines after a series of disastrous transactions, but there has been a growing expectation that the industry is heading for a wave of M&A as companies are flush with cash and management teams have worked hard to reassure investors that they have learned from past mistakes.

BHP last year bought copper producer OZ Minerals Ltd. for about $6.4 billion in its first major purchase in years, but has otherwise focused until now on selling assets such as oil, gas and coal.

The clear lure here would be Anglo’s South American copper business, long eyed by bigger players in the industry — even though it has recently faced setbacks and has had to reduce its production forecasts.

While BHP said that Anglo’s non-South African iron ore business and its coking coal mines in Australia would fit well with its existing operations, the future of Anglo’s De Beers diamond unit was less certain.

BHP — which was once a major diamond producer itself — said that business would be put on a strategic review, along with other Anglo assets, which would likely include its nickel operations in Brazil. Anglo itself has already been reviewing the future of its business units including De Beers.

Why BHP Is Targeting Anglo in Mining Mega Deal: QuickTake

Both companies are also investing in new fertilizer businesses — BHP is building a massive potash mine in Canada, while Anglo is developing a polyhalite mine on the east coast of England.

The combination proposed by BHP would be likely to draw antitrust scrutiny, particularly given the large percentage of global copper production that would be concentrated into a single company. Governments around the world are increasingly viewing copper as a strategic mineral, given its central role in the energy transition.

BHP produced about 1.2 million tons of copper in 2023 on an equity basis, while Anglo’s output was 826,000 tons.

It’s also possible that the proposal for Anglo could now prompt others to make a move. No. 2 miner Rio Tinto Group has also been investing in copper production, while Glencore Plc last year made an unsuccessful offer for Teck Resources Ltd., which has a coveted copper business, before eventually reaching a deal for the Canadian company’s coal assets.

Read: BHP Bid for Anglo American Set to Unleash M&A: Energy Daily

The bid comes with copper prices trading around two-year highs near $10,000 a ton, and many prominent figures in the industry calling for further gains as a supply crisis deepens. Along with the closure of a giant mine in Panama, major production setbacks at Anglo American have contributed to an unexpected squeeze on mined supplies, and added urgency to long-running warnings that the market could see historic deficits as demand accelerates during the energy transition.

Anglo’s valuation may make it more attractive, but it remains a highly complicated business. The company owns majority stakes in two South African-listed miners — Anglo American Platinum Ltd. and Kumba Iron ore Ltd. It also has a long and complicated relationship with South Africa, where the state pension fund manager is its biggest shareholder.

South Africa’s Public Investment Corp. said it will assess any offers that are presented to shareholders, but reiterated that “the mining sector remains a critical part of the South African economy, impacting a wide variety of stakeholders, therefore, new opportunities that may arise in the sector need to take these factors and long-term sustainability into account.”

Centerview Partners, Goldman Sachs Group Inc. and Morgan Stanley are advising Anglo American.

–With assistance from Mark Burton and Loni Prinsloo.

(Updates with banking advisors, response from shareholder.)

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