Anglo American and Teck Resources to Merge, Forming a Copper Giant

LONDON – Two mining giants, Anglo American of Britain and Teck Resources of Canada, agreed Tuesday to merge, creating a powerhouse copper producer in a deal that could reshape the industry.

The transaction, one of the biggest ever in mining, comes as global commodities giants have explored various combinations – including plans that Anglo and Teck have resisted.

The deal Tuesday also takes place amid surging global demand for copper, whose uses include components for electronics, data centers, construction fittings and more. This summer, President Donald Trump imposed a 50% tariff on some copper products imported to the United States, citing national security.

Much of the world’s production of that metal would come from the company formed in the merger of Anglo and Teck, which would own big stakes in major mines in Chile, Peru and Canada. Together, the companies reported more than $10 billion in profit last year; copper would account for about 70% of their total production.

The new company, to be called Anglo Teck, is expected to yield about $800 million in cost savings, executives said.

“We are unlocking outstanding value both in the near and longer term,” Duncan Wanblad, Anglo’s chief CEO, said in a statement. “Now is the optimal time to take this next strategic step to accelerate our growth.”

Shares in Anglo jumped 10% in London trading Tuesday, while shares in Teck were up 12% in New York.

The two companies agreed to combine after fending off unwanted takeover approaches in recent years: BHP of Australia had bid about $50 billion for Anglo last year, while Glencore of Switzerland offered $23 billion for Teck.

Glencore eventually agreed to buy a majority stake in Teck’s coal business, leaving the Canadian company focused largely on copper.

But analysts have predicted that the mining industry would still be awash in dealmaking as companies seek to streamline their operations. Anglo has said that it is looking to sell its coal division and divest its 85% stake in De Beers, the diamond miner and producer.

The transaction was calibrated to pass muster with an array of constituencies, including investors and national governments. It was pitched as a so-called merger of equals, with neither side’s shareholders getting a higher premium. Its global headquarters is set to move to Teck’s home in Vancouver, British Columbia, but it will maintain stock listings in London, New York, Toronto and Johannesburg.

That merger-of-equals message also appeared aimed at allaying potential concerns held by Canadian officials, who have sought to protect one of the country’s biggest industries. Last year, Canada’s industry ministry said that it would clear deals involving big mining businesses only “in the most exceptional of circumstances.”

Anglo and Teck said they expected their deal to close within 12 to 18 months – but their agreement allowed either company to consider unsolicited takeover proposals and to walk away from the proposed deal if better offers presented themselves.

This article originally appeared in The New York Times.