Anglo and Teck could still work together if deal falls apart, Anglo CEO says

Duncan Wanblad, chief executive of Anglo American PLC, left, and Teck Resources Ltd. CEO Jonathan Price. (Credit: Handout/Anglo American PLC and Teck Resources Ltd.)

If Anglo American PLC‘s proposed takeover of Vancouver-based Teck Resources Ltd. falls apart, the two companies could create a joint venture to manage their adjacent copper mines in Chile, Anglo’s chief executive said.

Such a deal would allow both companies to continue operating as separate entities, but still derive synergies from nearby assets.

“An asset-level kind of deal is, of course, possible,” Duncan Wanblad said. “But the strength of the combined company outweighs the asset synergy itself in terms of what it will be able to do in the future.”

Under the proposed $70-billion deal, the resulting new company, Anglo Teck, would be headquartered in Vancouver, but domiciled in the United Kingdom, where it would also have its primary stock listing.

Anglo American shareholders would control 62.4 per cent of the new company while Teck shareholders would retain 37.6 per cent.

Teck chief executive Jonathan Price would become deputy CEO, a position Wanblad — who would retain his title in the new entity — said would be responsible for integration “and have full accountability working with me to get that done.”

But the deal has been facing pushback. Industry Minister Melanie Joly, who holds authority to make or break the deal under the Investment Canada Act, has said the companies need to do more to show that the deal will have a net benefit for this country.

Wanblad said his company did not directly engage with the federal government about its plans with Teck until just a few days before the deal was publicly announced.

He said his team is keenly aware that many of Canada’s largest mining companies were purchased by foreign companies in recent decades and that’s created scrutiny of foreign takeovers by government and industry, although he blamed the media for exacerbating the situation.

“There’s a nervousness fuelled a lot by you guys and it builds a momentum,” Wanblad said, referring to the media. “It’s completely legitimate in the context of the evidence to the contrary, which is that the industry did get hollowed out here and a lot of mining companies left Canada.”

To that end, Anglo American has committed to keeping the new entity’s headquarters in Vancouver, though Wanblad said there isn’t a specific legal mechanism to enforce this. He also plans to relocate to Vancouver from London.

He said there are several reasons why a combination makes sense, including that the combined entity would have more capital to plow into a long list of potential projects, from new copper exploration to processing plant expansions.

Anglo American is making a swing through Canada, including a stop in Ottawa next week, to shore up support for its proposed takeover of Teck.

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But there would be a precedent for creating a joint-venture operation, too. In 2019, Toronto-based Barrick Mining Corp. and Colorado-based Newmont Corp. forged a joint venture to combine their gold mining assets in Nevada.

But Wanblad said combining Anglo American and Teck in their entirety would make more sense.

“Mergers of this scale and size don’t present themselves as an opportunity often,” he said. “It’s kind of almost like once in a lifetime … and it’ll be a real shame if it gets stopped dead in its tracks.”

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