UK-based mining major Anglo American and Canadian miner Teck Resources have announced a definitive agreement to merge, creating a new entity known as Anglo Teck.
This merger positions the company as a major force in the global critical minerals market, securing its place as one of the top five copper producers worldwide. The company will be headquartered in Vancouver, Canada, offering substantial exposure to copper assets.
The boards of both firms have unanimously endorsed the deal and recommend its acceptance by shareholders.
The merger will be implemented through a plan of arrangement. Under this plan, Anglo American will issue 1.3301 ordinary shares to existing Teck shareholders for each outstanding Teck class A common share and class B subordinate voting share.
Eligible Canadian Teck shareholders will have the option to receive 1.3301 exchangeable shares instead. This arrangement is said to align with the principles of a merger of equals at market value.
A special dividend of $4.5bn is anticipated for Anglo American shareholders before finalising the merger.
In the enlarged firm, Anglo American’s shareholders will hold a stake of 62.4% while Teck’s shareholders will own the remaining 37.6%.
The merger aims to deliver benefits for shareholders and stakeholders by strengthening portfolio quality and strategic alignment.
Anglo Teck will leverage the combined expertise of both companies in operations, sustainability, marketing, and project management to drive growth and value creation over time.
It will manage an extensive portfolio that includes six major copper operations alongside iron ore and zinc businesses. These assets are expected to support further expansion through brownfield and greenfield projects located in established mining jurisdictions, enhancing the company’s global footprint.
The transaction is forecasted to generate annual pre-tax synergies of approximately $800m within four years after completion. These synergies will primarily arise from economies of scale and operational efficiencies.
Furthermore, plans are in place to optimise the value of adjacent Chilean assets like Collahuasi and Quebrada Blanca, aiming for $1.4bn in average annual revenue synergies between 2030-2049.
Teck CEO Jonathan Price said: “This merger of two highly complementary portfolios will create a leading global critical minerals champion headquartered in Canada – a top five global copper producer with exceptional mining and processing assets located across Canada, the US, Latin America, and Southern Africa.
“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.”
Leadership roles within the newly formed company will be based in Canada, with Duncan Wanblad as CEO, Price as deputy CEO, John Heasley as chief financial officer (CFO), and Sheila Murray serving as chair.
Anglo American CEO Wanblad said: “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.”
Anglo Teck is expected to have stock market listings on major exchanges including the London Stock Exchange (LSE), Johannesburg Stock Exchange (JSE), Toronto Stock Exchange (TSX), and New York Stock Exchange (NYSE), subject to approvals from respective authorities.
The completion of the merger is contingent upon customary conditions, shareholders’ approvals, and regulatory approvals across various jurisdictions and is projected within 12-18 months.
In July, Teck received board approval to begin the Highland Valley Copper Mine Life Extension Project (HVC MLE), aimed at extending the life of Canada’s largest copper mine until 2046.
