Anglo American and Teck Resources will merge in a $53 billion deal to create one of the world’s largest copper producers, the companies announced Tuesday.
The all-share “merger of equals” will form Anglo Teck plc, a new Canada-headquartered group with a primary listing in London and additional listings in Johannesburg, Toronto and New York. Anglo American shareholders will hold about 62.4% of the combined company, while Teck investors will own 37.6%.
The merger will give Anglo Teck more than 70% exposure to copper, positioning it as a top-five global producer with annual output of about 1.2 million tonnes. Production is forecast to grow 10% to 1.35 million tonnes by 2027, with major mines in Chile, Peru and Canada. The portfolio will also include premium iron ore from South Africa and Brazil, zinc operations in Alaska and Canada, and development projects in the U.S., Mexico and Finland .
The companies expect $800 million in annual cost savings within four years, plus $1.4 billion a year in additional earnings from integrating adjacent Chilean copper mines Collahuasi and Quebrada Blanca between 2030 and 2049.
Anglo American will issue 1.3301 shares for each Teck share. Before completion, Anglo American will pay its shareholders a $4.5 billion special dividend, or about $4.19 per share .
The combined company will be led by Anglo American CEO Duncan Wanblad as chief executive, Teck CEO Jonathan Price as deputy chief executive, and Anglo American CFO John Heasley as chief financial officer. Sheila Murray, currently Teck’s chair, will chair the new board.
Headquarters will be in Vancouver, with major offices in London and Johannesburg. The companies pledged at least C$4.5 billion in Canadian investments over five years, including the Highland Valley Copper extension, and committed to maintain employment levels in Canada.
Boards of both companies unanimously backed the transaction, which requires shareholder and regulatory approval in Canada, the UK, South Africa and other jurisdictions. Closing is expected within 12 to 18 months