Anglo American, Teck strike merger in decade’s top mining deal

[Redator]

Anglo American (LON: AAL) is acquiring Teck Resources (TSX: TECK.A TECK.B, NYSE: TECK), Canada’s largest diversified miner, in a $50-billion all-share deal that would create the world’s fifth-largest copper producer — if regulators in Canada, the United States and China sign off.

Anglo will exchange 1.3301 shares for each Teck share, a structure it called a “zero-premium” merger. The math tells a different story: the exchange ratio represents a 17% premium on Teck’s closing price Monday, though Anglo will offset it with a $4.5-billion special dividend to its investors, leaving the effective premium at just 1%.

If completed, Anglo shareholders will own 62.4% of the new company, to be named Anglo Teck, while Teck shareholders will hold 37.6%. Anglo CEO Duncan Wanblad will lead the combined miner, with Teck CEO Jonathan Price as deputy.

Wanblad said she headquarters will be based in Vancouver, while Anglo’s London office, where its stock is listed, will be “streamlined”. Secondary listings are planned for Toronto and Johannesburg, along with a New York float via American Depository Receipts.

The merger is aimed at securing copper supply amid soaring demand for the metal, essential to electrification and renewable energy. Teck’s Quebrada Blanca mine in Chile, plagued by cost overruns and operational challenges, is central to that strategy. Both Anglo and Teck have shed assets in recent years to focus on critical metals, with Teck selling most of its coal unit to Glencore and Anglo moving to exit coal, platinum and diamonds.

Canada’s Industry Minister Mélanie Joly said the merger will undergo review under the Investment Canada Act to ensure it delivers a “net benefit” to the country. “Any new investments must support our core mission of building one economy in the best interests of Canadians,” she posted on X.

The deal comes after both miners resisted takeover bids: Anglo rebuffed a $49-billion approach from BHP Group last year, while Glencore failed to acquire Teck in 2022. Analysts say consolidation has been building across the industry as companies race to secure copper reserves.

More to come…