BHP Group Ltd is headquartered in Australia and trades in Australia as BHP AU and in the USA as ADRs as BHP US. BHP Group Plc is headquartered in the UK, and trades in the UK as BHP LN and in the USA as ADRs as BBL US (ticker symbols as found on a Bloomberg terminal). DetailsĪs noted above, the two DLC entities are BHP Group Plc and BHP Group Ltd. I feel this event presents an attractive return with relatively low risk that is basically uncorrelated with the overall market and is not a directional bet in the traditional sense. The unification event provides a unique arbitrage opportunity to profit from the difference at which BBL and BHP trade with a short timeline for the event to be completed and the profit to be realized. Some traders examine the trading patterns and go long and short the spread over a period of time in an attempt to make money from the fluctuations in the share prices and spread.īHP announced with its fiscal 2021 financial results on August 17 th, 2021 (for the fiscal year-ended June 30, 2021) that it would “unify” its “corporate structure under BHP’s existing Australian parent company to realize simplification and enhanced strategic flexibility benefits.” Unification is another term for doing away with, or collapsing, the DLC structure. There are various reasons for this that I won’t go into here. Often the two different DLC securities trade at different prices. Companies that have collapsed their DLC structure in the past include ABB (ABB), Brambles ( OTCPK:BMBLF), Eurotunnel ( OTCPK:GRPTF), and Thomson Reuters ( TRI). Companies that have DLC structures, besides BHP, include Carnival ( CCL) ( CUK ) (the cruise company), Rio Tinto ( RIO ) ( OTCPK:RTPPF ) ( OTCPK:RTNTF ), and Investec ( OTCPK:IVTJF ) ( OTCPK:ITCFY ) ( OTCPK:IVTJY ).Ĭompanies with DLCs may decide that they no longer wish to remain DLCs and pursue a collapse of the structure. Non-fungible means one share cannot replace another. Virtually all DLCs are cross-border, and have tax and other advantages for the corporations and their stockholders.”ĭLCs usually come about as a result of a merger of two companies in two different jurisdictions (countries) where there’s a desire to keep two separate, non-fungible share listings. “A dual-listed company or DLC is a corporate structure in which two corporations function as a single operating business through a legal equalization agreement, but retain separate legal identities and stock exchange listings. Wikipedia does a pretty good job of explaining what a DLC is.
Robert Cianflone/Getty Images News OverviewīHP, comprised of BHP Group Plc (NYSE: BBL) and BHP Group Ltd (NYSE: NYSE: BHP) is a dual-listed company (“DLC”) with headquarters in Australia and the United Kingdom.
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