Teck(US:TECK)2025-09-09 18:00Merger Overview - The merger between Teck Resources and Anglo American will create Anglo Teck, a top five global copper producer with over 70% exposure to copper[2]. - The merger is expected to complete within 12-18 months, subject to customary closing and regulatory conditions[3]. - The merger will result in Anglo American shareholders owning approximately 62.4% and Teck shareholders owning approximately 37.6% of Anglo Teck plc post-completion[3][9]. - Each class A common share and class B subordinate voting share of Teck will be exchanged for 1.3301 ordinary shares of Anglo American upon completion of the merger[30]. - The merger is expected to close within 12-18 months, subject to various approvals including shareholder and regulatory[37]. - The combined company will be listed on the TSX, subject to approval, and will have its global headquarters in Canada[52]. - The headquarters of the merged entity is expected to be located in Vancouver, aligning with strategic operational goals[74]. Financial Performance - Anglo American reported underlying EBITDA of US$8,460 million for the year ended December 31, 2024, while Teck reported adjusted EBITDA of CAD$2,933 million, indicating robust financial performance[22]. - The merger is projected to generate pre-tax recurring annual synergies of US$800 million by the end of the fourth year post-transaction, with approximately US$775 million expected by the end of the third year[54][55]. - Long-term operational synergies of US$1.4 billion (100% basis) in underlying EBITDA revenue are anticipated between the Collahuasi and Quebrada Blanca operations from 2030 to 2049[56]. - Estimated one-off cash costs of approximately US$700 million will be incurred in the first three years to realize the recurring synergies[55]. - The merger is expected to achieve a one-off cash synergy of at least US$200 million through improved working capital management within the first three years[58][59]. - Anglo American's historical underlying EBITDA for the year ended December 31, 2024, is a non-GAAP measure that includes the Group's attributable share of associates' and joint ventures' underlying EBIT[69]. - Teck's historical adjusted EBITDA for the year ended December 31, 2024, is defined as EBITDA before the pre-tax effect of adjustments made to profit from continuing operations attributable to shareholders[71]. Investment and Growth Plans - Anglo Teck plans to invest at least CAD$300 million in critical mineral exploration and technology in Canada over the next five years[18]. - Anglo Teck will invest approximately CAD$4.5 billion over five years in Canada, focusing on various projects including the Highland Valley Copper Mine Life Extension and critical minerals processing capacity[25]. - Anglo Teck commits to investing at least CAD$300 million in Canadian critical mineral exploration and technology[53]. - Anglo American and Teck will invest at least approximately CAD$4.5 billion over five years in Canada, including significant projects like the Highland Valley Copper Mine Life Extension Project, which is expected to create 2,900 jobs during construction[52]. Employment and Community Engagement - Anglo Teck plans to maintain employment levels in Canada with no net reduction in the number of employees as a result of the merger[25]. - Anglo Teck will honor all agreements with communities, Indigenous governments, and labor unions in Canada, promoting respect for Indigenous and community rights[25]. - Anglo Teck will maintain current aggregate employment levels across Canada with no net reduction in the number of employees as a result of the merger[53]. Strategic Vision and Risks - The merger aims to position the combined company for successful listings on the TSX and NYSE, with plans for American Depositary Receipts[74]. - The merger's success will depend on the strategic vision and effectiveness of the new management team formed after the merger[74]. - The merger is subject to various risks, including the possibility of not completing on the anticipated terms or timing due to regulatory hurdles[75]. - Market conditions, including interest rates and foreign exchange rates, may impact the merger's success and the future performance of the combined companies[75]. - Teck is undertaking a Comprehensive Operations Review expected to conclude by October 2025, with updates to guidance communicated no later than Q3 results[38]. Production and Synergies - Combined annual copper production is projected to reach 1.2 million tonnes, with an expected growth of around 10% to 1.35 million tonnes by 2027[15]. - An additional US$1.4 billion in underlying EBITDA uplift is anticipated from synergies between the Collahuasi and Quebrada Blanca operations from 2030 to 2049, potentially increasing annual copper production by approximately 175,000 tonnes[3][14]. - The production mix is based on assumed copper production of 1,355kt, iron ore production of 61Mt, and zinc production of 423kt, converted to copper equivalent[46]. - The pro forma ownership in Anglo Teck is based on the exchange ratio of 1.3301, with Teck shares totaling 489 million on a fully diluted basis[46]. - The merger between Anglo American and Teck is anticipated to yield significant benefits and synergies, with expectations of enhanced production levels and operational efficiencies post-merger[72]. Regulatory and Forward-Looking Statements - Teck and Anglo American are working towards obtaining all necessary regulatory and shareholder approvals for the merger, which is crucial for its completion[73]. - Anglo American and Teck will not update forward-looking statements unless required by securities laws, emphasizing the importance of the information available at the time of the statements[76].