Canada Clears Anglo American’s Takeover of Teck Resources

The Canadian government has effectively cleared Anglo American Plc’s proposed takeover of Teck Resources Ltd. （TSX: TECK.A, TECK.B）（NYSE: TECK）based on national security grounds, according to a report by The Globe and Mail, removing a preliminary obstacle for the blockbuster mining merger.

The clearance came by default after the initial 45-day national security review period for the foreign takeover lapsed without an extension from the government, the report cited an unidentified source as saying. Anglo American filed its application for review with Ottawa on September 19.

A spokesperson for Canadian Industry Minister Melanie Joly did not immediately return a request for comment. Minister Joly had previously stated that the government would assess the transaction under the Investment Canada Act, with a final decision expected in the coming months. She emphasized that while the national security review is a standard procedure, the government expects “stronger long-term commitments to Canada” from the merging parties.

Focus on Critical Minerals

The national security review specifically examined the transaction’s potential impact on critical minerals and related supply chains. Canada has designated copper as a critical mineral, and Teck Resources holds significant copper assets. The deal aligns with the government’s push, under the leadership of Prime Minister Mark Carney, to rebuild critical mineral capacity, which Ottawa views as integral to national sovereignty.

If approved, the merger would mark the largest mining deal in a decade. The combined entity, with a market value of approximately $70 billion, would become one of the world’s top five copper producers. Its projected annual output of 1.35 million tonnes would surpass the 2024 output of the Escondida mine. To garner support, the companies have committed to investing around $4.5 billion in Canada over the next five years, including the expansion of the Highland Valley Copper mine.

Key Hurdles Remain

Despite clearing the national security review, the deal’s completion is not assured and hinges on two critical steps:

1. Net Economic Benefit Review: The Canadian government retains the power to block the takeover if it fails this stringent test, which assesses the transaction’s overall impact on the country’s economy. Historically, such reviews have been known to extend beyond six months.
2. Shareholder Approval: Shareholders of both Anglo American and Teck Resources are scheduled to vote on the deal at separate meetings in London and Vancouver on December 9. The transaction requires approval from at least two-thirds of the votes cast to proceed. The merger recently gained endorsements from leading proxy advisory firms Institutional Shareholder Services and Glass Lewis & Co., which recommended that shareholders vote in favor.

As the global energy transition accelerates, the strategic importance of critical mineral resources continues to grow, keeping market attention firmly fixed on the progress of this major merger between two mining giants.

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