London (AFP) – British mining group Anglo American and Canadian peer Teck Resources on Tuesday announced plans for a multi-billion-dollar merger, creating a champion of copper production and other critical minerals. A combined group is worth more than US$50 billion according to the companies’ current market values, while the agreed deal is expected to complete in 12-18 months, subject to regulatory hurdles. It will create Anglo Teck, headquartered in Vancouver and with a primary listing in London, according to a joint statement. It is the sector’s biggest tie-up for some years.
Copper demand has exploded in recent years as the world transitions to cleaner energy and artificial intelligence (AI). The metal is needed for solar panels, wind turbines, electric-vehicle batteries, and consumer electronics. “This merger of two highly complementary portfolios will create a leading global critical minerals champion headquartered in Canada,” Teck chief executive Jonathan Price said in the statement. Anglo American shareholders will own 62.4 percent of the new group and Teck shareholders the remainder. Price added that the new company would be “a top five global copper producer with exceptional mining and processing assets located across Canada, the United States, Latin America, and Southern Africa.”
Copper is used also in military hardware, including aircraft, while there is growing demand linked to the boom in AI and data centres. Alongside copper assets, the new group will operate premium iron ore, zinc, and crop nutrients businesses. Anglo Teck expects recurring annual pre-tax cost savings of $800 million, beginning four years after the merger completes. “We are all committed to preserving and building on the proud heritage of both companies, both in Canada, as Anglo Teck’s natural headquarters, and in South Africa where our commitment to investment and national priorities endure,” said Anglo American chief executive Duncan Wanblad. He will become CEO of Anglo Teck, with Price his deputy.
– Shares soar – Shares in Anglo American surged more than eight percent in early trading, taking it to the top of London’s benchmark FTSE 100 index. Shares in rival miners jumped on its coattails. “Anglo American’s merger with Teck is its latest strategic pivot that cements copper at the heart of its portfolio,” noted Matt Britzman, senior equity analyst at Hargreaves Lansdown. “With over 70 percent copper exposure…the combined group is positioned to ride the structural demand story tied to electrification and energy transition.”
Anglo American in 2024 rejected a multi-billion-dollar takeover bid from Australian rival BHP, one year after Swiss commodities giant Glencore failed with an offer for Teck. More recently, US group Peabody Energy walked away from a $3.8-billion deal to buy Anglo American’s steelmaking coal business. In 1917, German-born industrialist Ernest Oppenheimer founded Anglo American in South Africa, 15 years after his arrival in the country.
© 2024 AFP
