BHP’s [ASX:BHP] bid for Anglo American [LON:AAL] is one of the cheekiest deal structures The Morning Flash has seen for a while.

The Big Australian miner has tabled an all-share takeover offer for its London-headquartered peer – but only after proposing a demerger of some of the target’s biggest listed assets and pre-positioning a sale of its diamond operation De Beers.

It’s a suggestion that would make a deal more digestible for BHP but, perhaps more importantly, means Anglo-American is unlikely to remain in its current form for much longer.

A break-up of Anglo American has been on investor agendas for a while and the structure of BHP’s bid makes that outcome more likely, whether or not a takeover is eventually agreed.

BHP’s offer values Anglo American at GBP 25.08 per share, an equity value of GBP 31.1bn (USD 38.9bn), at closing prices on 23 April.

That is composed of an offer of 0.7097 BHP shares for each Anglo American share, worth about GBP 16.82 per share, and the implied value of the target’s stakes in Anglo American Platinum [JSE:AMS] and Kumba Iron Ore [JSE:KIO] worth around GBP 4.86 and GBP 3.86 per Anglo share, respectively.

BHP wants Anglo to demerge both Amplats and Kumba before deal completion. The bidder has also said it will consider a sale of diamond operation De Beers post-completion.

Anglo said it is reviewing BHP’s bid proposal with advisors, but it may have been boxed in by the BHP bid. Shareholders are unlikely to be enthralled by the BHP bid level, which is only 19% above Anglo’s undisturbed share price. But the status quo does not look like an option for the target’s board now BHP has put a break-up on the table.

That means Anglo will need to come up with some value-creating alternatives to placate shareholders if it rejects BHP’s approach. Divestments of Amplats, Kumba and De Beers would represent the most obvious options. The plan would likely meet with approval from South Africa’s state-owned investment vehicle Public Investment Corp (PIC), which owns 7% of Anglo and is its largest shareholder. PIC has reportedly pushed for disposals of Anglo’s South African assets in the past.

Shares in Anglo American gained almost 13% this morning to GBP 24.83 following confirmation of BHP’s interest. The stock closed at GBP 21.11 on Tuesday, the day before speculation of a bid was first reported.

At a deal value of GBP 40bn (USD 49bn) including debt, the deal if completed would be the largest mining deal of all time, according to Mergermarket data. It would exceed Glencore’s [LON:GLEN] merger with Xstrata which had a deal value of USD 38bn.