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Teck Resources has agreed to merge with Anglo American to become Anglo Teck.
The companies said the “merger of equals” will create a company that will be a global critical minerals champion and one of the world’s largest producers of copper.
They also committed to having Anglo Teck’s global headquarters in Vancouver, with corporate offices in London and Johannesburg.
Anglo American CEO Duncan Wanblad will become CEO of the combined company, while Teck CEO Jonathan Price will be deputy CEO. Anglo American chief financial officer John Heasley will remain in the same role and Teck chair Sheila Murray will be chair of Anglo Teck.
“This merger of two highly complementary portfolios will create a leading global critical minerals champion headquartered in Canada,” Price said in a statement.
“This transaction will create significant economic opportunity in Canada, while positioning Anglo Teck to deliver sustainable, long-term value for shareholders and all stakeholders.”
Under the agreement, Teck shareholders will receive 1.3301 Anglo American shares for each class A and class B share they own.
Anglo American’s board also plans to declare a special dividend expected to be about $4.19 US per share to its shareholders ahead of completion of the merger.
Anglo American shareholders will own 62.4 per cent of the combined company, while existing Teck shareholders will hold 37.6 per cent, on a fully diluted basis.
Deal still needs shareholder approval
A two-thirds majority vote by Teck’s class A and class B shareholders, voting as separate classes, is required to approve the deal, while a majority vote is need by the Anglo American shareholders.
The deal is also subject to competition and regulatory approvals in various jurisdictions globally and approval under the Investment Canada Act.
Canadian Industry Minister Melanie Joly said in a social media post that the federal government will address several issues as it considers the merger, including the combined firm’s pledge to have its senior leadership based in and reside in Canada.
Teck Resources and Anglo American expect the merger to be completed in the next 12 to 18 months.
