On Tuesday, mining giants Teck Resources (NYSE: TECK) and Anglo American announced that they have reached a “merger of equals” agreement to create one of the world’s largest copper producers. The newly merged company will have a combined market value of approximately $53 billion, making it one of the largest mining transactions in the past decade.
Following the announcement, Teck Resources’ stock rose 11.3%, while Anglo American’s shares climbed 9.1%. By comparison, the S&P 500 and the Dow Jones Industrial Average gained 0.3% and 0.4%, respectively. Meanwhile, copper prices reached $4.58 per pound, up approximately 14% year to date.
Under the agreement, the merged company will be named “Anglo Teck” and headquartered in Vancouver. Before the completion of the merger, Anglo American shareholders will receive a special dividend of $4.19 per share and will hold a 62.4% stake in the combined entity. The transaction is expected to take 12 to 18 months to complete and is projected to generate approximately $2.2 billion in annual synergies.
Teck Resources is forecast to achieve 2025 EBITDA of $2.8 billion, while Anglo American is expected to report around $6.1 billion in EBITDA for the same period.
Duncan Wanblad, CEO of Anglo American, stated that the merger will establish a global leader in critical minerals. Jonathan Price, CEO of Teck Resources, added that the combination brings together two of the largest and highest-quality copper-focused companies, positioning the merged entity among the top five global copper producers with premium mining and processing assets across Canada, the U.S., Latin America, and Southern Africa.
Canadian mining giants have long been targets of acquisition by foreign competitors. Notable examples include Xstrata’s takeover of Falconbridge in 2006, followed by Vale’s acquisition of Inco and Rio Tinto’s purchase of Alcan. More recently, in 2023, Glencore proposed a $23 billion acquisition of Teck. After extended negotiations, the deal resulted in Glencore purchasing Teck’s coal business for $7.3 billion. Anglo American has also frequently been the subject of acquisition interest, with BHP Group making a $49 billion offer last year that ultimately was unsuccessful.
