Miner Anglo American will move its headquarters out of London after agreeing a £40billion merger with a Canadian rival that creates one of the world’s largest copper producers.
The FTSE 100 giant, which last year fended off a £39billion bid from BHP, is joining forces with Teck Resources in the sector’s second-largest deal ever.
Anglo Teck will be based in Vancouver, Canada, but maintain its primary share listing on the London Stock Exchange.
The proposed deal was welcomed by shareholders in both companies and could spark counter-offers from rival suitors and a wave of consolidation across the sector, according to analysts.
It is even thought BHP could return with a new offer for Anglo.
Under the terms of the merger announced yesterday, Anglo will own 62.4 per cent of the combined group while Teck will hold 37.6 per cent.
Copper deal: The FTSE 100 mining giant Anglo American, which last year fended off a £39bn bid from BHP, is joining forces with Teck Resources in the sector’s second-biggest deal ever
Anglo shareholders will receive a special dividend of $4.19 per share, totalling $4.5billion (£3.3billion). Shares in the mining giant rushed up 9.1 per cent in London.
The deal comes as Anglo bears a major restructuring under chief executive Duncan Wanblad following the BHP bid.
It has sold its nickel and platinum businesses and is in talks to offload iconic diamond firm De Beers – though the £2.8billion sale of its steelmaking coal business fell through last month.
Wanblad will become Anglo Teck’s chief executive with Teck’s Jonathan Price serving as his deputy.
‘We are all committed to preserving and building on the proud heritage of both companies,’ said Wanblad.
‘We have a unique opportunity to bring together two highly regarded mining companies whose portfolios and capabilities are deeply complementary.’
Anglo told investors the merger is expected to generate annual cost savings and efficiency gains worth £600million four years after the deal’s completion.
The union – the second largest in the sector behind Glencore and Xstrata’s £66billion merger in 2013 – creates the world’s fifth-largest copper company.
The firms operate Quebrada Blanca and Collahuasi, adjacent copper mines in Chile.
The metal is used in the power and construction sectors and is poised to benefit from burgeoning demand from the electric vehicle sector and other new applications including data centres for artificial intelligence.
Miners are racing to dominate the copper market, though many attempts to strike big deals have fallen through. Teck rejected a £17billion takeover offer from Glencore in 2023.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the special dividend ‘sweetens the near-term picture’ for Anglo American investors.
A host of investors with holdings in the firms welcomed the plans, including Legal & General, the Church of England Pensions Board, Aberdeen and Ninety One.
‘This is a consolidation that makes sense and brings complementary cultures together,’ said Adam Matthews, of the Church of England Pensions Board.
George Cheveley, a fund manager at Ninety One, added: ‘It’s a deal that makes a lot of sense.’
Analysts at Berenberg said Glencore and BHP could launch counter offers of their own.
Chris Beauchamp, chief market analyst at IG, said: ‘It’s interesting to see two companies who have been bid targets find refuge in each other’s arms, snubbing their suitors and going their own way.’
Miner closes in on De Beers sale
Anglo American is edging closer to the sale of De Beers as buyers circle the diamond firm.
One insider said ‘the sale will go ahead’ even after Anglo’s deal with mining and mineral developer Teck Resources.
Anglo American put De Beers up for sale as part of a radical restructuring programme after it fended off a £39bn takeover bid from BHP
‘There is a lot of interest,’ the source added, including from potential trade buyers as well as private equity.
It is understood that a sale of De Beers is more likely than a stock market listing – dashing hopes the diamond firm could bring some sparkle to the London exchange.
Anglo put De Beers up for sale as part of a radical restructuring programme after it fended off a £39billion takeover bid from BHP.
Russ Mould, at broker AJ Bell, said Anglo has ‘hung on’ to its stake in De Beers ‘for too long’.
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