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Anglo American, which previously owned Zimbabwe’s Unki platinum mine (now operated by independent company Valterra Platinum), is set to acquire Teck Resources, Canada’s largest diversified mining company, in a US$50-billion all-share merger.
By Ryan Chigoche
If approved by regulators in Canada, the United States, and China, the deal will create the world’s fifth-largest copper producer.
Under the terms of the merger, Anglo American will exchange 1.3301 of its shares for each Teck share. While officially described as a “zero-premium” merger, the exchange ratio reflects a 17% premium on Teck’s closing price on Monday.
Anglo plans to offset this with a US$4.5-billion special dividend to its investors, bringing the effective premium down to just 1%.
Upon completion, Anglo shareholders will hold 62.4% of the combined entity, to be named Anglo Teck, while Teck shareholders will own 37.6%.
Duncan Wanblad, CEO of Anglo American, will lead the merged company, with Teck CEO Jonathan Price serving as deputy CEO. Headquarters will be located in Vancouver, with Anglo’s London office to be streamlined. Secondary listings are planned in Toronto and Johannesburg, alongside a New York listing via American Depository Receipts.
The merger strengthens Anglo’s access to Teck’s copper assets amid rising global demand for the metal, essential for electrification and renewable energy.
A centrepiece of the deal is Teck’s Quebrada Blanca (QB) mine in Chile, which has faced operational and cost challenges.
Both companies have been reshaping portfolios to focus on critical minerals. Teck sold most of its coal operations to Glencore, while Anglo has divested coal, platinum, and diamond assets. Teck recently launched a major operational review, scheduled for completion in October, prioritising improvements at QB.
Analysts are of the view that the merged company will emerge as a leading copper producer with a diversified portfolio, including six copper production sites, as well as iron ore and zinc operations, offering significant growth potential.
Teck has been exploring operational synergies between QB and Collahuasi, a nearby copper mine in northern Chile co-owned by Anglo and Glencore. The companies anticipate annual pretax synergies of US$800 million, with potential EBITDA gains of up to US$1.4 billion through shared procurement and operational efficiencies.
Industry observers note the operational logic of transferring high-grade ore from Collahuasi to the QB plant to optimise production. While Glencore was not consulted, it has previously advocated for combining the two Chilean mines to reduce costs.
Analysts See a Major Win for Anglo
Experts consider the merger a major strategic gain for Anglo, as it secures high-quality copper assets that are in high demand globally.
At the same time, regulatory approval in Canada will be required under the Investment Canada Act to ensure the deal provides a net benefit to the country, a process that could take up to 18 months.
Analysts also suggest that the Canadian review process may deter potential rival bids, as competitors would need to offer attractive incentives or relocate management to Canada.
The deal could trigger interest from other global miners, including Freeport McMoRan and Agnico Eagle Mines, potentially sparking a competitive environment for acquiring copper resources.
The merger follows a broader wave of consolidation in the copper sector, with companies seeking to secure critical raw materials. Anglo had previously fended off a US$49-billion offer from BHP, while Glencore’s 2023 bid for Teck fell through.
Following the announcement, Anglo shares rose nearly 10% in London to 2,498p, giving it a market value of £29.4 billion (US$40 billion). Teck stock climbed 17% in New York pre-market trading to US$40.95, valuing the company at US$17.2 billion.
