A successful takeover of Anglo American under the arrangements BHP Group has offered could lead to outflows of $4.3-billion from South Africa, according to a JPMorgan Chase & Co. analysis.

Such an outflow, if a deal goes ahead, could weaken the rand, which has gained 4.4% against the dollar, the most of 16 major currencies tracked by Bloomberg, over the last five weeks.

The deal, proposed by BHP and rejected by Anglo, would involve Anglo distributing its holdings in its South African iron ore and platinum units to shareholders. That, according to JPMorgan’s South African mining analyst Catherine Cunningham, would lead to developed-market investor index funds selling the unbundled stocks, resulting in the outflow.

While Anglo has spurned BHP’s $49-billion bid, it has agreed to talk to the company, which must now make a firm offer by May 29. A successful deal could also affect the share prices of the units, Anglo American Platinum and Kumba Iron Ore, Cunningham said.

“There is now a materially higher probability that BHP will reach an agreed deal,” she wrote in the May 23 note to clients. “We see downside risk to the share prices of both Amplats and Kumba.”

Cunningham didn’t assess the potential impact on the rand.

According to her analysis, developed-market funds would sell $9.4-billion in stock and $5.1-billion would be bought by emerging-market investors, resulting in the net outflow. JPMorgan estimated the index fund holdings in Anglo American based on publicly available data.

“Locals will not sell anything, developed market index funds will sell every share they receive and DM active and others will sell 90% of what they receive,” Cunningham estimated. “EM active funds will buy 50% of what’s for sale.”

Amplats, which has a market value of R192-billion, is nearly 80% owned by Anglo American. Kumba, which has a capitalization of R170-billion, is almost 70% held by Anglo American.

Developed-market index funds would need to sell their shares as Johannesburg-listed stocks wouldn’t fit their investment mandate. Active investors are likely to want to limit their exposure to single-commodity and -country stocks. Kumba’s mines are all in South Africa while Anglo Platinum has one small operation in Zimbabwe, with the rest in South Africa.

Spinning off the companies would also add $14.2-billion to the market capitalization of the MSCI South Africa index, or about 6%, Cunningham wrote.