Teck Resources Progresses With Anglo American Merger Deal

Teck Resources Limited TECK announced that the Supreme Court of British Columbia approved its previously announced merger agreement with Anglo American plc NGLOY. This pushes the deal closer to completion with only satisfaction or waiver of customary closing conditions remaining, including regulatory approvals in various jurisdictions worldwide.

Teck Resources’ Merger With Anglo American

In September, Teck Resources entered the merger agreement with Anglo American to form the Anglo Teck group. This move is expected to create a leader in global critical minerals and be highly attractive to both Teck Resources and Anglo American shareholders.

Teck Resources’ shareholders voted to approve the merger in early December.

Based in Canada, Anglo Teck will have more than 70% exposure to copper and is set to be among the top five global copper producers. The new company will boast an industry-leading portfolio, consisting of six world-class copper assets, and premium iron ore and zinc operations.

The combined annual copper production of 1.2 million tons is projected to grow 10% to 1.35 million tons by 2027. Anglo Teck is also set to be a major producer of premium iron ore for cleaner steelmaking. The combined company will be one of the world's largest zinc producers, with operations like the Red Dog mine in Alaska and the Trail Operations in British Columbia.

The deal will provide a significant boost to Canada's economy by investing C$4.5 billion ($3.25 million) over five years. The Canadian investment includes extending the life of the Highland Valley Copper Mine and boosting critical minerals processing capacity at Trail. Anglo Teck will also move forward with potential major new copper mines in Northwestern British Columbia and invest in critical minerals exploration, innovation, skills training, research and job creation in Canada.

The combined company will also have a footprint in South Africa, where it will continue to invest further.

Within four years of completion, the deal is expected to yield $800 million in annual pre-tax synergies. Around 80% of this is expected to be achieved within two years through economies of scale and operational efficiencies. The merger is also expected to generate an additional $1.4 billion in EBITDA synergies from 2030 to 2049 by optimizing adjacent assets, Collahuasi and Quebrada Blanca, through operational integration.

After the closing of the deal, Teck Resources will hold 37.6% of Anglo Teck, while Anglo American will retain 62.4%.
Each Teck Resources Class A and Class B share will be exchanged for 1.3301 Anglo American shares. The deal is subject to regulatory and court approvals. The boards of directors of both Anglo American and Teck Resources have given the go-ahead for the merger.

TECK’s Stock Price Performance

The company’s shares have gained 1.7% in the past year compared with the industry’s 31.9% growth.

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Teck Resources’ Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank of 3 (Hold).

Some better-ranked stocks from the basic materials space are Agnico Eagle Mines AEM and OR Royalties Inc. OR. AEM sports a Zacks Rank #1 (Strong Buy) and OR has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Agnico Eagle Mines’ 2025 earnings is pegged at $7.77 per share. The estimate indicates year-over-year growth of 83.6%. It has an average trailing four-quarter earnings surprise of 11.6%. Agnico Eagle Mines’ shares have surged 107.6% in a year.

The consensus estimate for OR Royalties’ 2025 earnings is pegged at 82 cents per share. The estimate indicates year-over-year growth of 57.7%. OR Royalties’ shares have surged 80% in a year.

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This article originally published on Zacks Investment Research (zacks.com).

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