ANGLO American’s $50bn takeover of Teck Resources has triggered fierce resistance in Canada, where investors and politicians are questioning whether the nil-premium deal serves national interests, said the Financial Times on Tuesday.
The all-share transaction announced last week has divided opinion despite backing from major institutional shareholders in both mining companies.
Canadian fund managers expressed dismay at the timing, with Teck shares trading near lows following poor performance at its Chilean Quebrada Blanca mine.
“Teck can easily create more value just by executing their business plan,” said Bryan Pilsworth, portfolio manager at Toronto’s Foyston, Gorden and Payne. “We think it’s better for Teck to get its own valuation higher before entertaining mergers.”
Dennis da Silva at Middlefield said he was caught “off guard” by the deal, noting many investors were displeased by the absence of any premium.
The transaction requires approval from two-thirds of Teck shareholders and faces scrutiny under Canada’s toughened Investment Canada Act, introduced after Glencore’s failed 2023 bid for Teck, said the Financial Times.
Critics dismiss plans to headquarter the combined entity in Vancouver whilst maintaining London’s primary listing as cosmetic window-dressing, the newspaper added.
“We’re a mining nation but don’t have a single company in the global top tier,” said Heather Exner-Pirot at the Macdonald-Laurier Institute. “This deal seems structured in a way to skirt those concerns.”
Former finance minister John Manley rejected claims of a “merger of equals”, arguing Anglo shareholders would control almost two-thirds of the combined group.
“I don’t see it as a merger of equals, I see it as a takeover by Anglo,” he said.
The 12-18 month approval process creates opportunities for rival bidders including Glencore and BHP to launch counter-offers.
Teck defended the deal, claiming the 20% share price jump since announcement represented a “significant premium”.
