Metals powerhouses Anglo American and Teck have agreed to a merger of equals, leaving them one of the world’s top five copper producers, with world-class assets across Canada, the US, Latin America, South Africa and Europe.
The merger is being effected by American issuing 1.3301 common shares to existing Teck stakeholders, for each Teck Class A common share and one Class B subordinate voting share. Anglo American and Teck shareholders will own approximately 62.4% and 37.6%, respectively, of Anglo Teck plc.
The combination is expected to generate recurring annual pre-tax synergies of $800 million, as well as an additional $1.4 billion of underlying EBITDA synergies between the adjacent Collahuasi and Quebrada Blanca operations in Chile, on an average annual pre-tax basis from 2030 to 2049.
Annual copper production is expected to increase by an additional 175 thousand tons annually.
An Anglo American spokesperson said: “Overall, this equal-equity merger unites a world-class copper portfolio with 1.2 million metric tons of annual production, high-quality iron ore and zinc, with additional option in crop nutrients.”
Regulatory hurdles remain, as the merger is subject to the usual completion conditions in a deal of this type, and approval under the Investment Canada and Competition Act and regulatory approvals in various jurisdictions globally are necessary.
Global copper demand has been driven by a growing electric vehicle market, coupled with copper-intensive renewable energy projects for solar and wind power installations. Grid modernization is also depleting copper supplies.
According to S&P Global Market Intelligence, there have been 117 metals and mining mergers and acquisitions so far this year, compared to a peak of 269 in 2021.
Copper production has been an important catalyst for consolidations, such as Mitsubishi’s acquisition of a 30% stake in Arizona’s Copper World in August.
