Anglo American, Teck to Merge Into $53 Billion Copper Giant
The deal, one of the mining industry’s biggest, comes as companies rush to raise their bets on copper
By Adam Whittaker and Rhiannon Hoyle
Anglo American and Teck Resources agreed to a merger that will create one of the world’s largest copper producers with a combined market value of more than $53 billion.
The deal is one of the biggest ever in the mining industry and comes as companies rush to raise their bets on copper, an industrial metal that is a key component in everything from AI data centers to electric vehicles.
Copper consumption is climbing amid the transition to greener energy but new supplies of the metal aren’t expected to keep pace with demand, leading to higher prices.
Projections of a huge shortfall in the coming years have put copper at the heart of dealmaking in the mining sector, with Anglo and Teck rejecting multibillion-dollar takeover approaches in the past two years from BHP and Glencore, respectively.
The deal announced Tuesday will create a top five global copper producer, with annual output of some 1.2 million metric tons and key assets in Chile, Peru and Canada.
Copper is expected to account for more than 70% of the combined company’s production mix, the companies said.
The new company will be called Anglo Teck, be based in Vancouver and have its primary listing in London.
Anglo Chief Executive Duncan Wanblad will lead the merged company, with Teck CEO Jonathan Price named deputy chief executive.
Shares of Anglo’s were up almost 10% in European trading in response to the deal, which will boost its exposure to copper while reducing the importance of other less in-demand commodities.
Under the deal, Anglo shareholders are set to own around 62.4% of the combined business, with Teck shareholders owning around 37.6%.
Anglo will pay its investors a special dividend of $4.5 billion ahead of the deal to account for its higher market valuation.
The transaction values Teck at more than $17 billion, according to a spokeswoman for Anglo.
The deal is expected to close within 18 months and deliver annual savings of around $800 million four years after completion, including the benefit of merging Teck’s Quebrada Blanca copper operations and Anglo’s neighboring Collahuasi mine in northern Chile.
Anglo said the merger doesn’t change its plans to sell De Beers, its embattled diamond business, which is suffering from weak sales and competition from cheaper manufactured gemstones.
“The combination will result in a compelling, large-scale copper business, we think, with zinc and iron ore exposure,” Berenberg analysts Richard Hatch and William Dalby said in a note to clients.
There have been rising expectations that a flurry of dealmaking could reshape the mining industry.
Mining executives are looking for ways to excite investors as China’s growth slows, betting on a future boom in copper, arguably the most critical metal for an energy transition because it is an efficient conductor of electricity.
Electric vehicles and solar and wind farms use copper in much greater quantities than gasoline-powered cars and coal-fired power stations.
The metal is also used in chips, wiring, cooling systems and other components for data centers, as well as the power infrastructure needed to run them.
The importance of copper hasn’t been lost on President Trump, who has said he wants to boost domestic production of the metal.
Copper is the Defense Department’s second-most used material, according to the White House.
Last month, the U.S. Geological Survey proposed adding copper to its list of critical minerals, as the Trump administration seeks to shore up supplies in an industry increasingly dominated by China.
Tuesday’s deal shows that, despite recent failed attempts, miners are willing to step up their pursuit of large-scale dealmaking, after sitting on the sidelines for years.
A burst of dealmaking during a China-led commodities boom ended with big write-downs that upset investors and made executives reluctant to pursue meaningful acquisitions for the better part of a decade.
The deal also illustrates a challenge for bolstering commodity supply: Many miners figure it is easier and cheaper to buy rather than build mines.
In countries including the U.S., several mine projects have advanced slowly because of environmental and community concerns.
Consolidation across the mining sector has been expected for some time and this deal could be the catalyst miners needed, said George Cheveley, a portfolio manager at Ninety One.
The investment group holds a roughly $600 million stake in Anglo and just under $70 million in Teck.
Rival suitors will likely emerge for Teck, analysts said.
Copper assets have been highlighted as a priority for a number of the world’s top mining companies.
Glencore is one possible bidder.
The London-listed commodities giant had a $23 billion offer for Teck rejected in 2023 before later buying the Canadian group’s steelmaking assets.
Teck’s scale in copper could also appeal to BHP.
The Australian company failed in a $50 billion bid to buy Anglo last year, in a move aimed at bolstering its exposure to the metal.
Still, any foreign-led deal for Teck would likely face scrutiny in Canada.
Melanie Joly, Canada’s industry minister, said Tuesday on social media that the government would review the deal with Anglo, taking into account the employment levels and planned spending in the country.
Canada last year approved Teck’s sale of its coal assets to Glencore, although at the same time cautioned that pending approval of foreign-led deals involving critical minerals would only be granted “in the most exceptional of circumstances.”
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