London (Reuters)-Anglo American mining company and Canadian Teck Resources announced on Tuesday that they will merge, in what will be the largest merger and acquisition agreement of the mining sector in more than a decade.
According to the proposed agreement, which will require regulatory approval, Anglo American shareholders will deter 62.4% of the new combined company, Anglo Teck, while Teck’s shareholders will be 37.6%.
Anglo Teck will be headquartered in Canada, but will be listed in London, the two companies said, whose combined market capitalization exceeds $ 53 billion.
The agreement marks a major Anglo bet on copper, whose demand should record strong increase, driven by the boom of electric vehicles and emerging uses, such as AI -powered date centers.
Both Anglo and Teck have been at the center of the industry’s acquisition interest in recent years, with Glencore seeking Teck and BHP aiming at Anglo for its extensive copper portfolios.
Anglo American shares in London rose more than 7% at the beginning of the trading session, after the announcement, on their way to their biggest daily gain in over a year, while the US-listed Teck papers rose 10.4% pre-market.
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Anglo’s executive president Duncan Wanblad will remain as CEO of the new company, while Jonathan Price of Teck will be the assistant president.
Wanblad, speaking to journalists from Vancouver, called the agreement of a “true merger of equals,” adding that Anglo Teck’s board would also be formed by the existing directors of the two companies.
“We will have a stronger and more resilient financial platform, with advantages of scale, including greater flexibility to relocate capital dynamically to the most return opportunities,” he said.
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The agreement has a fully action -based structure, no additional prize, but Anglo’s shareholders will receive a special dividend of $ 4.5 billion.
“As a merger, we can enjoy the best of both, and we don’t have to pay anything on both sides in terms of prize to get the total benefit,” said Wanblad.
Economy and efficiency gains economy
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The merger is expected to generate annual cost economies and efficiency gains of US $ 800 million until the fourth year after completion, Anglo said.
The two companies operate adjacent copper mines in Chile – broken Blanca and Collahuasi – which should provide more operational benefits.
Teck CEO, Price, said that obtaining regulatory approvals for the business could take 12 to 18 months. He added that the Canadian family Keevil, who owns most of Teck’s class A actions, supported the deal.
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“We have the irrevocable support of Dr. Keevil and the other class A voters,” he said.
Analysts highlighted possible expectations of rival offerings.
“The risk of interference will be a big question for the market in this agreement,” wrote the analysts of Berenberg in a statement.
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Glencore was seen as a potential rival to acquire Teck, they said, while BHP could go on the scene seeking to expand its own copper business.
