Anglo American buys Teck Resources to create USD50b mining giant
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The news: Anglo American has agreed to combine with Canada’s Teck Resources, creating a USD50 billion ($75.6 billion) copper-mining giant in one of the biggest mining deals in over 10 years.
The numbers: Anglo will pay 1.3301 shares for each Teck share, in a deal that would represent a 17% premium to the Canadian miner’s closing share price on Monday, according to Bloomberg. Anglo, with a market capitalisation just under GBP27 billion, will also issue a special USD4.5 billion dividend to its own shareholders ahead of the combination, meaning the effective premium will be just 1%. The companies described the deal as “a merger of equals.”
London-listed Anglo will own 62.4% of the combined group, deal terms announced on Tuesday state, with Teck shareholders owning the rest.
Shares in Anglo rose over 9% on the news, while Teck’s US-listed shares surged over 10% in premarket trading.
The context: The merged company, to be known as Anglo Teck will be headquartered in Vancouver, but will retain its primary stock listing in London, with secondary listings in Johannesburg, Toronto and New York.
The deal gives Anglo access to Teck’s suite of copper mines, succeeding in its efforts to secure copper assets in high-demand. The companies said that they expect the merger to deliver pre-tax annual cost savings of USD800 million.
The boards of both companies unanimously recommend the deal and Anglo CEO Duncan Wanblad will head the new Anglo Teck.
Both companies have successfully fended off attempted takeovers from larger rivals in recent years, with BHP’s failed GBP39 billion pursuit last year of Anglo prompting Wanblad to overhaul the business, including a possible sale of its De Beers diamond unit.
Teck was the been the subject of takeover attempts by Glencore in 2023 and subsequently struck a USD7 billion deal with Glencore to sell its steelmaking coal business.
What they said: Wanblad said in a statement: “We are unlocking outstanding value both in the near and longer term – forming a global critical minerals champion with the focus, agility, capabilities and culture that have characterised both companies for so long. Having made such significant progress with Anglo American’s portfolio transformation, which has already added substantial value for our shareholders over the past year, now is the optimal time to take this next strategic step to accelerate our growth.”
Jonathan Price, CEO of Teck, commented: “It is a natural progression of our strategy and portfolio simplification, which created a platform to enable exactly this sort of transformative transaction. Bringing together our world-class copper assets, premium iron ore and zinc operations and an outstanding pipeline of high-quality growth projects provides enormous resiliency and optionality.”
The sources: Anglo American, Teck, Bloomberg, FT
