In the mining sector, the largest merger in recent years. What's important for investors

Mining giant Anglo American has agreed to buy Canadian Teck Resources: the deal will create a company worth more than $50 billion. This is the largest deal in the mining sector in recent years. On the news, Anglo shares rose by almost 10% in London, while Teck shares rose by 18% on the US pre-market.

Two of the world's leading mining companies, Anglo American and Canada's Teck Resources, have agreed to merge. The combined company will be called Anglo Teck. Its value will exceed $50 billion, based on the current market capitalization of Anglo and Teck, writes Bloomberg. This is the largest merger and consolidation deal in the sector for more than a decade, according to Reuters.

Under the terms of the agreement, Anglo will pay 1.3301 of its shares for each Teck share: this implies a 17% premium to the Canadian company's closing price on Monday, September 8, Bloomberg calculated. However, Anglo will also pay its investors a special dividend of $4.5 billion before the merger, so the actual premium will be reduced to just 1%, the agency noted. The companies on Tuesday, Sept. 9, presented the deal as a transaction without a premium.

Anglo American shareholders will have 62.4% of the combined company, while Anglo Teck shareholders will have 37.6%. Anglo CEO Duncan Wanblad will lead the new structure, while Teck CEO Jonathan Price will be his deputy. The headquarters will be located in Vancouver (Canada), shares will be traded on the stock exchange in London.

The deal gives Anglo access to the coveted Teck copper mines at a time when Anglo itself was a takeover target and under pressure from shareholders, Bloomberg writes. "This looks like a significant success for Anglo American, and if they manage to realize the deal, it will be a great move - they will have secured high quality copper assets that have been an industry-wide focus," Panmure Liberum analyst Duncan Hay said in comments to the agency.

The boards of directors of both companies unanimously backed the deal. Anglo secured the support of the Keevil family, which controls Teck through Class A shares with a "super-vote." The family in 2023 thwarted an attempt by Glencore Plc to buy the company. The Teck deal would require approval from two-thirds of that company's shareholders with Class B securities, the largest of which is China Investment Corp.

"The Kiwil family's agreement is a key factor given their Class A stake," Hay noted. - But other shareholders may be unhappy with the lack of a premium and weak recent price performance."

Both companies have been the subject of interest from larger players in recent years. For example, Anglo last year rejected a $49 billion offer from BHP Group. The announcement of Anglo's merger with Teck could trigger new offers to buy each of them, according to Bloomberg. According to the companies' statement, their agreement allows them to consider offers separately and terminate the deal in case of a more favorable option.

Shares of Anglo American at trading on September 9 rose on the London Stock Exchange by almost 11% in the moment. They reached their highest level since January 24.

Teck's securities, which have declined in value since the beginning of 2025 by almost 14% (by the close of trading on Sept. 8) at the U.S. premarket appreciated by more than 18%.

Teck's main asset is the Quebrada Blanca 2 copper project in Chile. Anglo owns a stake in the neighboring Collahuasi mine, which creates opportunities to increase production and profits if the operations are combined. The companies said they expect $800 million in annualized pre-tax synergies. Additionally, the integration of the Chilean assets could generate another $1.4 billion in annual synergies, Bloomberg points out.

The deal must be approved by regulators in China, the US and Canada. If approved, completion is expected within 12-18 months.

This article was AI-translated and verified by a human editor