Anglo American’s mega-merger with Teck Resources crossed an important milestone on Tuesday as shareholders in the two mining giants signed off the deal. Shareholder approval had been one of the main challenges in the merger process, putting the groups on track to form a $53bn copper powerhouse and one of the world’s biggest miners of the metal, as planned. Still, the deal’s remaining regulatory approvals are expected take at least another year to iron out, leaving the door open to more opportunistic bids that could derail the merger process.
The greenlight from shareholders comes just two weeks after rival BHP launched its third attempt at an Anglo takeover, with a surprise, last-ditch offer from the Australian giant highlighting the intrinsic risks in Anglo and Teck’s nonexclusive deal discussions. It was the third buyout attempt from BHP, which early last year offered Anglo $49bn (R700bn) for 100% of the company, hoping to gain ownership of its coveted copper mines in Chile and Peru. Anglo CEO Duncan Wanblad heralded the “major milestone” and said he was “extremely pleased” to have received such strong support from shareholders, most of whom voted in favour of the merger as well as the name change to Anglo-Teck.
In a statement on Wednesday, Wanblad said the group will “continue to work closely with Teck and the regulatory authorities across various jurisdictions” to obtain the necessary approvals over the course of next year. These include approvals from Canadian authorities under the Investment Canada Act, as well as competition and regulatory approvals across various other jurisdictions. “Bringing together the best of both companies, Anglo-Teck is set up to deliver outstanding value for shareholders of both companies — in the near term through a unique combination of industrial and other synergies, and in the longer term by applying proven capabilities to exceptional growth optionality, offering investors more than 70% exposure to copper,” said Wanblad.
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The Teck merger, which would turn Anglo into a dominant global producer of copper, comes as the metal has taken centre stage in Anglo’s growth strategy. The group’s ongoing portfolio transformation plan, formed partly as a counter to BHP’s takeover offers, aims to unlock shareholder returns by offloading its steelmaking coal, platinum group metals and nickel businesses, with diamond business De Beers, to focus exclusively on copper, iron ore and fertilisers.
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