The London-listed miner Anglo American has agreed to merge with its Canadian rival Teck Resources, in a deal that will create a $53bn (£39bn) global copper group after both companies saw off takeover attempts.
The merger to form one of the biggest copper producers in the world is expected to bring hundreds of job losses at Anglo’s London office as the company prepares to move its headquarters to Vancouver, Canada.
The new company will retain Anglo’s primary listing on the London Stock Exchange – held since 1999 – with secondary listings in Johannesburg, Vancouver and New York. But Anglo Teck’s senior leadership team will be based in Vancouver after sweeping efforts by the Canadian government to protect the country’s minerals sector.
Justin Trudeau’s administration warned last year that Canada’s government would only approve foreign takeovers of large Canadian mining companies involved in critical minerals production “in the most exceptional of circumstances” to protect its interests in the minerals and metals that are considered crucial in the global transition away from fossil fuels.
Anglo Teck said there would be “no net reduction in the number of employees” in Canada, in line with the legislation.
However, the companies said the deal should generate $800m of annual cost savings within four years. About $60m of these savings are expected to come from the board and head office, raising the possibility of job cuts as the business pushes for what it called “de-duplication and rationalisation” of the board and executive leadership.
Under the terms of the proposed deal, Anglo’s shareholders will own 62.4% of the new company, while Teck holders will control 37.6%, in a merger that would represent a 17% premium to Teck’s closing share price on Monday.
However, the companies have presented the deal to the market as a zero premium merger because Anglo plans to pay its investors a $4.5bn special dividend before the tie-up.
Anglo’s chief executive, Duncan Wanblad, who will lead the combined group from Canada, described the deal as a “true merger of equals” which would be “an exceptional transaction for Canada” and generate “significant enduring benefits for the country”.
“We will continue to play a significant role in the mining ecosystems of Canada, South Africa, the UK and across Latin America,” he said. “We will be even better positioned to support the critical mineral strategies of these world class mining jurisdictions.”
The deal has emerged after Wanblad was forced to fend off a series of takeover attempts by its larger rival BHP last year, pushing it to radically restructure the group, including the seeking the sale of its iconic diamonds business De Beers.
Anglo, which was founded in 1917 by the entrepreneur Ernest Oppenheimer and also owns the troubled Woodsmith fertiliser mine project in North Yorkshire, rebuffed the £39bn takeover proposal from BHP Group while Teck rejected a buyout offer from Glencore in 2023 for £16.6bn.
Russ Mould, the investment director at AJ Bell, said: “Anglo American has turned from prey to predator. The deal to buy Teck Resources, if it completes, means Anglo has not only pulled itself out of a hole, but also sends a message to mining peers that it is not a pushover.”
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If approved, the deal would be one of the biggest ever agreed in the mining sector. The largest deal on record is the Glencore-Xstrata merger in May 2013, which was valued at $90bn.
It would also mark a multibillion-dollar bet on the global copper market, which is expected to grow in the years ahead as countries compete for supplies to expand electricity grids as well as build renewable energy projects and electric vehicles.
Jonathan Price, the chief executive of Teck, who would become deputy chief executive of the merged business, said he would expect copper to provide more than 70% of the new company’s earnings by 2027.
The two companies operate neighbouring copper businesses in Chile – Teck’s Quebrada Blanca and Anglo’s Collahuasi operations.
“We will combine six world-class copper assets in very very good mining jurisdictions to create something of very high quality that we expect to be of enormous interest to the equity markets,” Price said.
Shares in Anglo climbed by more than 10% after the deal, giving the company a market valuation of £29.2bn, while Teck’s US-listed shares climbed by more than 10.4% in pre-market trading.