The deal, which could be the largest in over ten years, is driven by the strategic importance of copper and could reshape the industry's major players.
In a move set to create one of the world's most formidable mining conglomerates, Anglo American Plc is in advanced discussions to acquire Canadian-based Teck Resources Ltd. The potential transaction, which could be announced as early as this week, would be the biggest mining deal in more than a decade and follows closely on the heels of both companies fending off their own takeover attempts. Anglo American is looking to pay for the acquisition primarily in stock, though the final structure and timing of the deal are still subject to change and could fall through.
Both Anglo American and Teck Resources have been targets of larger competitors in recent years. Anglo American successfully fought off a $49 billion takeover bid from BHP Group last year, while Glencore Plc's attempt to acquire Teck in 2023 was ultimately unsuccessful. These failed bids created a domino effect, prompting executives across the industry to reassess their own portfolios and potential acquisition targets. The fear of being left behind, particularly in the race for copper resources, has become a significant driver of this M&A activity.
However, a successful Anglo-Teck deal would be the first "mega deal" to come to fruition in recent times. The industry has been cautious of overpaying, a lesson learned from a series of disastrous takeovers during the commodity super cycle fueled by China's growth.
For Anglo American, acquiring Teck could serve as a defensive strategy, making it a less attractive target for future takeover bids. The deal could also spur other rivals into action, as Teck's valuable copper assets have been a focus for several of the industry's biggest players. The Canadian company is controlled by the founding Keevil family through special "supervoting" shares, with China Investment Corp. as its largest shareholder.
Any deal would face significant regulatory hurdles, particularly from the Canadian government, which has recently tightened its stance on foreign takeovers of critical minerals producers. Last year, Canada stated it would only approve such acquisitions "in the most exceptional of circumstances."
A merger could create operational synergies, particularly in Chile, where Teck's flagship Quebrada Blanca 2 (QB2) copper project is located near Anglo American's stake in the Collahuasi mine. Combining these operations could lead to increased production and profitability. However, both companies have recently faced challenges. Teck initiated a review of the QB2 operation due to years of setbacks, while Anglo American's plans to sell its coal mines have collapsed, and it is also navigating a crisis in the diamond industry as it attempts to sell De Beers.
