Miningweb: Canada bristles as Anglo-Teck merger puts mining sovereignty to test

Key topics:Canadian critics warn Teck is undervalued in proposed mergerRegulatory scrutiny under toughened Investment Canada Act loomsSupport grows, but rivals like BHP may counterofferSign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Kerry Lanaghan.According to a report from our partners at the Financial Times, Anglo American's proposed $50bn merger with Teck Resources has triggered a wave of debate in Canada, raising concerns about the timing, structure, and implications for the country's mining sector.The all-share, nil-premium deal has gained broad backing from major institutional investors with exposure to both companies. Yet many Canadian voices, from investors to policymakers, question whether the transaction undervalues Teck and undermines Canada's ambition to maintain mining champions on home soil.A key sticking point is valuation. Teck's stock has been depressed by operational setbacks at its Quebrada Blanca copper mine in Chile. Some argue this leaves the company vulnerable to being sold on the cheap. "Teck can easily create more value just by executing their business plan," noted Bryan Pilsworth, portfolio manager at Toronto-based Foyston, Gordon and Payne. Others expressed frustration at the absence of the usual 20-30% takeover premium, despite Teck's insistence that a 20% post-announcement share price rise constitutes a "significant premium."Support from Teck's controlling shareholder, Norm Keevil, who holds a majority of supervoting shares, ensures the deal has momentum. But it still requires approval from two-thirds of Teck's class A and B shareholders, alongside a 50% vote from Anglo investors. Regulatory hurdles are equally significant. Canada strengthened its Investment Canada Act (ICA) following Glencore's failed bid for Teck in 2023, sharpening scrutiny of foreign takeovers in strategic industries.The merged entity, to be branded "Anglo Teck," would be headquartered in Vancouver but keep its primary listing in London - a move some critics dismiss as cosmetic. Heather Exner-Pirot of the Macdonald-Laurier Institute warned that Canadians should be wary of losing influence over their largest miners. "We're a mining nation, but don't have a single company in the global top tier. This deal seems structured in a way to skirt those concerns," she argued.Government reaction has been mixed. Industry minister Mélanie Joly welcomed the investment but stressed "further conversations" were needed to ensure lasting Canadian benefits, including job creation and a strong headquarters. Reports also emerged that former Bank of England governor Mark Carney had insisted Anglo locate its headquarters in Canada before lending support. Former finance minister John Manley was blunt: "I don't see it as a merger of equals. I see it as a takeover by Anglo."With approvals expected to take 12-18 months, the deal remains vulnerable to counteroffers from rivals such as Glencore or BHP, both of whom have attempted to buy Anglo or Teck in the past. Analysts highlight potential synergies between Anglo's Collahuasi mine and Teck's Quebrada Blanca project in Chile. Still, scepticism lingers. Scotiabank's Orest Wowkodaw called the transaction's modest premium and the loss of a Canadian mining champion "disappointments."Whether the Anglo-Teck tie-up proves to be a defining moment in global mining consolidation or a misstep for Canada's resource sovereignty will hinge on how investors and regulators ultimately judge the balance between scale, value, and national interest.

Miningweb: Canada bristles as Anglo-Teck merger puts mining sovereignty to test

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