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By Jeffrey Sparshott
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- Global diversified miner Anglo American PLC (AAL.LN) Thursday said it planned to sell off a handful of businesses and would reorganize its management structure as it looks to focus on a core portfolio of commodities.
The announcement comes a week after rival Xstrata PLC (XTA.LN) walked away from a proposal to merge the two companies and continuing speculation that it will renew its offer if shareholders think Anglo is underperforming.
Including aggregates business Tarmac, the companies slated for divestment contributed about 11%, or $1.3 billion, of the group's 2008 earnings before interest, taxes, depreciation and amortization, or Ebitda, the company said.
"The portfolio changes we have announced are the logical next step in focusing the Group on our core mining activities, enabling us to strengthen our balance sheet further," Chief Executive Cynthia Carroll said in a statement.
Tarmac has long been slated for disposal but the sales process stalled in 2008 as credit markets seized. The company doesn't expect a quick sale of Tarmac and doesn't plan to rush disposal of the other businesses.
Anglo Thursday added its Scaw Metals steel business, Copebras fertilizers business, Catalao ferroniobium business and a portfolio of zinc assets to its list of disposals.
Recently, the miner has shed its stakes in AngloGold Ashanti Ltd. (ANG.JO), Tongaat Hulett Ltd. (TON.JO), a sugar company, and Hulamin Ltd (HLM.JO), an aluminum business.
The miner also said it would reorganize management around remaining commodity groups and eliminate a layer of management, moves that will cost Philip Baum, chief executive for Anglo Ferrous Metals, Ian Cockerill, head of Anglo Coal, and Russell King, chief strategy officer, their jobs.
The company will now be organized around Anglo's core commodities and geographies: with platinum based in South Africa, copper in Chile, nickel in Brazil, metallurgical coal in Australia, thermal coal in South Africa, subsidiary Kumba Iron Ore Ltd. (KIO.JO) in South Africa and other iron ore in Brazil.
"The delayering creates the opportunity for a new generation of executive management to come through and I look forward to working with them," Carroll said.
The reshuffle is expected reduce overhead staff by about 25% and save $120 million per year, the company said.
Company Web site: www.angloamerican.co.uk
-By Jeffrey Sparshott, Dow Jones Newswires; +44 (0)207 842 9347; jeffrey.sparshott@dowjones.com