RE: Bloomberg commentary on Anglo/Teck10 Sep 2025 15:38
World.
“It has finally started,” said George Cheveley, a portfolio manager at Ninety One UK Ltd., which holds shares in both companies. “Do people come in for one or the other, or wait for the two to combine? All of those things are possible. It might be a catalyst for others to do other deals, to combine elsewhere.”
Ever since Glencore tried to buy Vancouver-based Teck in 2023, the mining industry has been in deal mode for the first time in over a decade. BHP tried unsuccessfully to buy Anglo in a $49 billion deal last year, while Rio Tinto and Glencore held talks to create the world’s biggest miner in late 2024.
Besides the deals that have become public, the past two years have seen almost constant contact between miners, as bankers and deal teams work on proposals and run the numbers over their rivals.
Still, until now no one found a way to get a deal done, with buyers constrained by shareholders who didn’t want to overpay and sellers reluctant to hand over much-sought-after copper mines without a very significant premium. Anglo and Teck seem to have found a way to bridge that divide.
Tal Lomnitzer, an investment manager at Janus Henderson Group Plc, which holds 1.59% of Teck shares and 0.66% of Anglo, according to data compiled by Bloomberg, says the combination has an “extremely compelling strategic logic with strong operational and financial synergies.”
“We believe there is a very high likelihood of the deal succeeding given unanimous approval by both boards and steps taken to address potential political and regulatory concerns in Canada,” he said.
For most of the past decade, deals were a dirty word in mining. The biggest miners have spent years on the sidelines after a series of disastrous transactions led to executives being fired and billions of dollars in writedowns and investors left furious.
Behind the resurgence in dealmaking is an insatiable appetite for copper. New supply is constrained, while demand is expected to grow exponentially as the global economy decarbonises. Nearly every major miner is bullish on the metal and investors are demanding more exposure to it.
Both the Anglo and Teck boards have unanimously recommended the deal, but it requires the approval of two thirds of Teck’s shareholders.
“Bringing them together feels slightly defensive, but it does make strategic sense,” said Iain Pyle, investment director at Aberdeen Group Plc, which holds 0.68% of Anglo American’s shares. “The question is whether it will reach completion without another player stepping in to look at these assets. They’ve clearly structured the deal to limit that risk, but it remains a possibility.”
The terms of the transaction include provisions that would allow either firm to consider unsolicited proposals. That leaves the door open for rivals to intervene with better offers.
Whatever happens, no one expects the mining sector to go back to being a desert for dealmaking.
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