After nearly a month of speculation, Canada’s Teck Resources Limited and Anglo American plc on Tuesday made their merger official. In fact, they are calling it an “equal merger.” This momentous event marks the beginning of a new phase for each organization. Together, they’re going to form a $70 billion copper-mining behemoth named Anglo Teck. Both companies confirmed the merger through joint press releases. They verified that it’s only received the required competition approvals in Canada and Australia, with other regulatory reviews still pending.
First announced in September, the merger has received overwhelming approval from shareholders, who gave their blessing last Friday. Anglo Teck will establish its headquarters in Vancouver. The majority of its execs and board members will have to reside there. That strategic location feeds into the companies’ broader objective of spawning at least 4,000 jobs of highly skilled Canadians. Further, they’re committing $4.5 billion worth of investments across the country over the next five years.
Melanie Joly, Canada’s Minister of Foreign Affairs, expressed her enthusiasm about the merger, stating, “It is an unequivocal endorsement of the federal government’s efforts to build the strongest economy in the G7.” She reiterated her concerns about the negative impact this merger would have on our Canadian economy, as well saying it would be a “major blow.” Joly noted that Anglo Teck will serve as a “truly Canadian champion on the world stage.”
The merger was solidly supported by David Eby, British Columbia’s Premier. In his remarks, Eby stated, “New mining giant Anglo Teck will be the largest company in our province’s history. They’ll help unlock prosperity in the Northwest and deliver good jobs and benefits across the province.” His remarks illustrate the expected boost to local economies that the investment would create.
Anglo American’s current valuation is over twice that of Teck. Both companies claim their merger will increase their combined competitive advantage in the industrial/farms to global mining supply chain. Jonathan Price, CEO of Teck, stated that this merger is focused on creating a “global critical minerals champion.” He thinks that’s pivotal given the dynamic nature of today’s economy.
Even as regulatory reviews move forward, stakeholders are hopeful about Anglo Teck’s future. Strengths-based merger This merger truly brings our resources and capabilities into alignment. The unfortunate result of this merger is that the new, combined entity is now better positioned to dominate the copper mining industry.
