Anglo American, Teck to Merge, Creating Copper Giant — 2nd Update

By Adam Whittaker and Rhiannon Hoyle

Anglo American and Teck Resources agreed to combine their businesses in a deal 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 miners rush to raise their bets on copper, an industrial metal that is essential to the energy transition, and to building and powering data centers.

Both companies had rejected takeover approaches from rivals in recent years and have sought to restructure their businesses. Anglo rejected a roughly $50 billion offer from BHP Group last year while Teck rejected a $23 billion offer from Glencore in 2023 before selling a Glencore-led group its steelmaking assets.

The deal is set to create a copper giant with an annual output of some 1.2 million metric tons. This would put the merged company roughly on par with U.S. producer Freeport-McMoRan, but still trailing Australia's BHP and Chile's Codelco.

The combined group's copper production would grow by around 10% to around 1.35 million tons in 2027, the companies said. Copper is expected to account for more than 70% of its production mix.

Anglo American shares were 10% higher in early London trade.

Anglo Teck, as it would be known, would be a global critical minerals champion, the chief executives of both Anglo American and Teck said in a joint statement. Last month, the U.S. Geological Survey proposed adding copper to its list of critical minerals, as the Trump administration seeks to shore up metal supplies in an industry increasingly dominated by China.

"The combination will result in a compelling, large-scale copper business, we think, with zinc and iron ore exposure," too, Berenberg analysts Richard Hatch and William Dalby said in a client note.

Anglo shareholders are set to own around 62.4% of the business, with Teck shareholders owning around 37.6%. The company will be headquartered in Vancouver with corporate offices in London and Johannesburg. As part of the deal, Anglo plans to pay its shareholders a special dividend of $4.5 billion, or around $4.19 per share.

Anglo CEO Duncan Wanblad would lead the merged company, with Teck CEO Jonathan Price named deputy chief executive. It is expected to have its main listing in London as well as having secondary listings in Johannesburg and Toronto, and American depositary receipts traded in New York.

Anglo American said the merger doesn't change its plans to divest of its embattled diamond business which is suffering from weak sales and competition from cheaper manufactured gemstones.

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 given it is a great 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 deal shows miners are willing to embark on large-scale dealmaking after sitting on the sidelines for years. A burst of dealmaking at the start of last decade, underpinned by 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.

It 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., many mine projects have advanced slowly due to environmental and community concerns.

"We have been expecting a new wave of M&A in mining, and this could be the start of it," Jefferies analysts wrote in a note after Bloomberg reported on the planned tie-up.

There is logic to an Anglo-Teck marriage, the analysts said. Not least any benefits between Teck's 60%-owned Quebrada Blanca copper operations and Anglo's neighboring 44%-owned Collahuasi mine in northern Chile.

The deal is expected to close within 18 months and deliver annual savings of around $800 million four years after completion, the companies said.

Yet analysts say it is likely rival suitors will emerge for Teck. Copper assets have been highlighted as a priority for a number of the world's top mining companies.

The Berenberg analysts said Glencore could be a possible rival bidder, although highlighted cultural differences that would be a hurdle for any deal. They also said that BHP could also be interested, given the scale Teck could add to its copper business.

"A bidding war could ensue," the Jefferies analysts said.

Write to Adam Whittaker at adam.whittaker@wsj.com and Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

September 09, 2025 05:40 ET (09:40 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.