Teck, Anglo American Forge Mining Giant

Merger
STAFF REPORTER
  • 16 Hours Ago
Teck Resources Limited and Anglo American plc have reached an agreement to combine in a merger of equals, forming the Anglo Teck group. The new entity will serve as a global critical minerals champion and a top-five global copper producer, with headquarters in Canada. Investors can expect more than 70 per cent exposure to copper.

Both companies view the merger as highly attractive for their shareholders and stakeholders. It enhances portfolio quality, resilience, and strategic positioning. By uniting their strengths, Anglo Teck will draw on established expertise in technical and operational excellence, sustainability, product marketing, and project execution to achieve substantial value-accretive growth across market cycles.

A World-Class Portfolio



Anglo Teck will possess an industry-leading set of producing operations, featuring six world-class copper assets alongside high-quality premium iron ore and zinc businesses. As one of the world's largest copper producers, it will benefit from some of the finest copper endowments globally. Major brownfield and greenfield copper development projects sit in attractive and established mining jurisdictions, supporting further business expansion. The group will also maintain growth options across its broader portfolio, including premium iron ore, zinc, and crop nutrients.

The merger anticipates delivering annual pre-tax synergies of around US$800 million by the end of the fourth year after completion. Approximately 80 per cent of these should materialise on a run-rate basis by the end of the second year, arising from economies of scale, operational efficiencies, and excellence in commercial and functional areas. Additionally, Anglo Teck plans to collaborate with key stakeholders and partners in Collahuasi and Quebrada Blanca to optimise these adjacent assets. This effort aims to unlock US$1.4 billion of underlying EBITDA revenue synergies on a 100 per cent, average pre-tax annual basis from 2030 to 2049, mainly through operational integration and optimisation. The approach builds on Anglo American's prior successes with similar adjacency partnerships in Brazil and elsewhere in Chile.



Leadership and Global Presence



Anglo Teck will emerge as a global mining leader, with its headquarters in Vancouver and corporate offices in London and Johannesburg to support the worldwide operations. Key leadership roles will centre in Canada, where Duncan Wanblad will serve as chief executive officer, Jonathan Price as deputy chief executive officer, and John Heasley as chief financial officer, with Sheila Murray as chair. The combined group will strengthen its role in the Canadian mining ecosystem while maintaining significant involvement in mining and business leadership in South Africa and the United Kingdom. It positions itself well to advance the critical minerals strategies of these nations and address priorities of local communities and stakeholders. Country offices and marketing hubs will continue to serve the operational footprint.

Duncan Wanblad, chief executive officer of Anglo American, said the merger unlocks outstanding value both near-term and longer-term, creating a global critical minerals champion with the focus, agility, capabilities, and culture long characteristic of both companies. He noted that, following substantial progress in transforming Anglo American's portfolio and adding shareholder value over the past year, the timing proves optimal for this strategic advance. Wanblad highlighted the unique opportunity to unite two highly regarded mining firms with deeply complementary portfolios and shared values, while committing to preserve and enhance the proud heritages of both in Canada as the natural headquarters and in South Africa with enduring investment commitments.

Jonathan Price, chief executive officer of Teck, said the merger of two highly complementary portfolios will establish a leading global critical minerals champion headquartered in Canada, becoming a top-five global copper producer with exceptional mining and processing assets across Canada, the United States, Latin America, and Southern Africa. He described it as a natural evolution of Teck's strategy and portfolio simplification, which built a foundation for such a transformative deal. Price emphasised that combining world-class copper assets, premium iron ore and zinc operations, and a superior pipeline of growth projects offers immense resilience and optionality, generating significant economic opportunities in Canada and delivering sustainable long-term value for shareholders and stakeholders.



Transaction Details



The merger will proceed via a plan of arrangement, under which Anglo American issues 1.3301 ordinary shares (or, for eligible Canadian Teck shareholders electing, 1.3301 exchangeable shares) to existing Teck shareholders for each outstanding Teck class A common share and class B subordinate voting share, aligning with a merger of equals at market values. Subject to certain conditions, the Anglo American board intends to declare a special dividend of US$4.5 billion, expected at roughly US$4.19 per ordinary share, payable to Anglo American shareholders on record ahead of completion. This special dividend optimises the opening balance sheet and ensures more balanced participation by Anglo American and Teck shareholders in future value creation. Post-completion, Anglo American and Teck shareholders will hold approximately 62.4 per cent and 37.6 per cent respectively of Anglo Teck plc on a fully diluted basis. The special dividend will adjust to align ordinary course dividends before completion.

Anglo Teck will enjoy a global capital markets presence in major centres of mining finance and expertise, with anticipated listings on the London Stock Exchange, Johannesburg Stock Exchange, Toronto Stock Exchange, and New York Stock Exchange via American Depositary Receipts, pending relevant exchange approvals.

At or before completion, Anglo American and Teck will each nominate half of the non-executive directors to the Anglo Teck board, with Sheila Murray as chair upon completion. Executive directors will include Duncan Wanblad as chief executive officer, Jonathan Price as deputy chief executive officer, and John Heasley as chief financial officer. The chief executive officer, deputy chief executive officer, chief financial officer, and most of the senior executive team will base in and reside in Canada, with meaningful representation from South Africa and the United Kingdom. Before completion, Anglo American will seek shareholder approval to rename legally to Anglo Teck plc, and thereafter the group will trade as Anglo Teck.