GLENCORE said on Friday its $6.93bn bid for Elk Valley Resources (EVR), a subsidiary of Canada’s Teck Resources would close on July 11 after the country’s regulatory authorities approved the transaction.
“We are pleased to have received final regulatory approval for the transaction and look forward to completing the acquisition and welcoming EVR into the Glencore Group,” said Gary Nagle, CEO of Glencore in a statement.
“Glencore’s Canadian assets form a significant part of our global business, and some have a history that dates back more than 100 years. The investment in EVR will further support our position as one of the largest diversified miners and suppliers of critical minerals in Canada,” he added.
Whether Glencore carries through its entire thermal coal strategy, which is to spin the assets off into a separately-listed company, possibly in New York, remained to be seen. Some of the group’s shareholders have lodged objections to the strategy.
Tribeca Investment Partners said in a letter in March that the mines should be retained even after buying Teck Resources’ coal mining unit. “We firmly oppose such divestiture and call on the board to retain these world class assets,” Tribeca said in its letter.
“Not only does retention align with the company’s long-held commitment to industry leading policy, but also strategically supports its earnings profile and the delivery of value to shareholders,” it said.
In terms of its processes, Glencore intends to hold consultations with shareholders regarding the possible demerger of its coal assets.
Nagle said the acquisition of EVR would “further enhance the quality of our portfolio, broadening our ability to provide high quality steelmaking coal, an important transition-enabling commodity, to customers around the world as well as contributing significant expected cashflows to the Glencore Group”.
