ANGLO American is close to securing a deal for Canada’s Teck Resources, said Bloomberg News citing sources familiar with the negotiations.
The London-listed miner is conducting advanced discussions regarding a potential takeover of Teck, with an announcement potentially this week. News of the talks sent Teck’s shares soaring more than 20% in after-hours New York trading.
The proposed deal would be share-based, said Bloomberg. Teck is valued at C$23.7bn (£12.7bn), whilst Anglo American is worth £26.9bn.
The deal marks a big bet on copper by Anglo American, said the Financial Times which also reported on the possible transaction. Teck is set to produce up to 525,000 tons this year and has plans to significantly expand production by the end of the decade, the newspaper said.
Both firms have previously attracted unwanted attention from larger rivals. Anglo successfully repelled a £36bn approach from BHP last year, whilst Glencore’s 2023 pursuit of Teck proved unsuccessful. These failed attempts catalysed widespread industry consolidation efforts, with executives keen to secure copper assets crucial for the global energy transition, said the newswire.
The combination would represent the first successful mega-merger following years of frustrated dealmaking activity. Industry boards remain cautious about overpaying, still scarred by disastrous acquisitions during the previous commodity supercycle.
A merger faces regulatory hurdles, particularly given Canada’s restrictive stance on foreign takeovers of critical mineral producers. The Keevil family controls Teck through special voting shares, whilst China Investment Corporation holds the largest conventional stake.
Both companies have recently streamlined operations – Teck divested its coal majority to Glencore, whilst Anglo exited platinum mining and seeks buyers for its coal assets and De Beers diamond division.
Representatives for both companies declined to comment on the speculation surrounding the potential transaction.
