Anglo American and Teck Resources have announced a merger of equals to create Anglo Teck, a new critical minerals company expected to rank among the world’s largest copper producers.
The deal will establish Anglo Teck as a “top five” global copper producer, with investors gaining more than 70 per cent exposure to copper.
The merger will be executed through a plan of arrangement, with Anglo American issuing 1.3301 ordinary shares to Teck shareholders for each outstanding Teck Class A common share and Class B subordinate voting share.
Upon completion, Anglo American shareholders will own 62.4 per cent of Anglo Teck and Teck shareholders will hold 37.6 per cent.
The combined entity is forecast to generate annual pre-tax synergies of about US$800 million (£588.93m) by the fourth year after closing.
From 2030 to 2049, it will also target approximately US$1.4 billion in annual EBITDA revenue synergies, particularly from optimising adjacent assets, including Collahuasi and Quebrada Blanca.
Anglo American also announced a US$4.5 billion special dividend to its shareholders before completion, aiming to balance the new company’s financial structure.
Anglo American CEO Duncan Wanblad said: “We are unlocking outstanding value both in the near and longer term – forming a global critical minerals champion with the focus, agility, capabilities and culture that have characterised both companies for so long.
“We have a unique opportunity to bring together two highly regarded mining companies whose portfolios and capabilities are deeply complementary, while also sharing a common set of values.”
Teck CEO Jonathan Price added: “This merger of two highly complementary portfolios will create a leading global critical minerals champion headquartered in Canada – a top five global copper producer with exceptional mining and processing assets located across Canada, the United States, Latin America and Southern Africa.
“It is a natural progression of our strategy and portfolio simplification, which created a platform to enable exactly this sort of transformative transaction.
“Bringing together our world-class copper assets, premium iron ore and zinc operations and an outstanding pipeline of high-quality growth projects provides enormous resiliency and optionality.”
Anglo Teck will combine six world-class copper operations alongside strong iron ore and zinc businesses.
Key assets include Teck’s QB2 in Chile (60%), Highland Valley Copper in Canada (90%) and Antamina in Peru (22.5%), one of the lowest-cost copper-zinc mines worldwide.
Its project pipeline features San Nicolas in Mexico (50%) and Zafranal in Peru (80%), as well as longer-term opportunities at Galore Creek in Canada and Nueva Union in Chile.
The company will be headquartered in Vancouver with planned listings on the London, South Africa, Toronto and New York stock exchanges.
Following the announcement, James Whiteside, Research Director at Wood Mackenzie, said: “The merger accelerates Anglo American’s strategy to focus on prioritising scale and high margin commodities and offers a geographically diversified pipeline of copper growth projects with strong returns.
“For Teck, the deal provides the highest copper exposure and least dilution among potential suitors while preserving strategic influence through enhanced board representation.”
Wood Mackenzie valued Teck’s post-tax sum-of-the-parts net asset value at US$10.8 billion, including US$13.8 billion from copper and US$1.1 billion from zinc, offset by US$4.1 billion in projected central costs through 2040.
Analysts noted that while growth upside exists at QB and from synergies with Collahuasi, operational challenges could weigh on performance.
“Regulatory scrutiny under Canada’s Investment Canada Act represents the most material risk, with the Minister of Industry required to confirm alignment with national economic and security interests,” Whiteside cautioned.
Advisors on the deal include Ardea Partners and BMO Capital Markets for Teck, with legal counsel from Wachtell, Lipton, Rosen & Katz, Stikeman Elliott, and Freshfields, along with Felesky Flynn as legal tax advisor.
Anglo American’s advisers are Centerview Partners, Morgan Stanley, Goldman Sachs and RBC Capital Markets, guided legally by Latham & Watkins, Torys and Webber Wentzel.
