Metals powerhouses Anglo American and Teck have approved a merger of equals sanctioning them to become one of the top five copper global producers, via world-class assets across Canada, the US, Latin America, Southern Africa, and Europe.
The merger has been effectuated by American issuing 1.3301 ordinary shares to existing Teck stakeholders, in exchange for each outstanding Teck class A common share and class B subordinate voting share. Anglo American and Teck shareholders will own approximately 62.4% and 37.6% respectively of Anglo Teck plc.
The amalgamation is anticipated to deliver pre-tax recurring annual synergies of $800 million, and an additional $1.4 billion of underlying EBITDA synergies between the adjacent Collahuasi and Quebrada Blanca operations in Chile, on an average pre-tax annual basis from 2030-2049.
Annual copper production is projected to potentially escalate by an annual additional 175,000 tons.
“Overall, this merger of equals unites a world-class portfolio of scale in copper with 1.2 million metric tons of annual production, high-quality premium iron ore and zinc, with additional optionality in crop nutrients,” an Anglo American company spokesperson said.
Regulatory obstacles remain, with the merger subject to completion conditions customary for a transaction of this nature, approval under the Investment Canada Act and competition and regulatory approvals in various jurisdictions globally are necessary.
Global demand for copper has been propelled through the heightened electric vehicles market, alongside copper-intensive renewable energy projects for solar and wind installations. Grid modernization is also sapping copper supplies.
According to S&P Global Market Intelligence, there have been 117 metals and mining M&As so far this year, compared with a peak of 269 in 2021.
Copper production has been a significant motivating factor for the consolidations, such as the Mitsubishi Corporation acquiring 30% of Arizona based Copper World in August.
