$70B Anglo-Teck merger faces Ottawa review, shareholders react positively

Core Viewpoint - The proposed merger between Anglo American and Teck is framed as a "merger of equals," despite Anglo American's market value being more than double that of Teck, with plans for equal management and board representation [1] Company Structure and Leadership - The new entity, Anglo Teck, will have its headquarters in Vancouver, with Teck's CEO Jonathan Price becoming deputy CEO, while Anglo American's CEO Duncan Wanblad and CFO John Heasley will retain their roles [2] - Teck's chair Sheila Murray will serve as chair of Anglo Teck, and board seats will be evenly distributed between the two companies [2] Regulatory Considerations - The merger will undergo review under the Investment Canada Act, which can block deals not deemed in the national interest, with the federal government considering the leadership's commitment to reside in Canada [3] Financial Commitments and Market Presence - The deal includes approximately $4.5 billion in spending commitments to Canada over five years, with potential for further development projects [4] - Anglo Teck will maintain listings on the London and Johannesburg stock exchanges and seek listings on the Toronto and New York stock exchanges, while remaining incorporated in London [4][5] Shareholder Dynamics - Teck shareholders will receive 1.3301 Anglo American shares for each of their shares, with Anglo shareholders retaining about 62.4% of the combined company and Teck shareholders holding 37.6% [7] - The merger does not include a premium for Teck shareholders, but it is expected to create significant synergies and enhance the value of Teck's Quebrada Blanca project [8] Market Reaction - Following the merger announcement, shares of both companies experienced significant increases, with Teck's shares rising over 14% and Anglo American's shares up more than 8% [10] - A two-thirds majority vote from Teck's shareholders and a majority vote from Anglo American's shareholders are required for the deal's approval [11]