London-listed mining giant Anglo American has agreed a deal to merge with Canadian rival Teck Resources to create one of the world’s largest copper producers with a combined value of close to £40 billion.
The deal will see Anglo American move its headquarters away from London, with the combined group to be led out of Vancouver in Canada, although it will retain corporate offices in the UK and Johannesburg, South Africa.
But the merged firm – to be called Anglo Teck – will keep its primary listing on the London Stock Exchange, with secondary listings in Toronto, South Africa and New York.
The deal is billed as a “merger of equals”, however, Anglo American shareholders will own about 62.4% of the merged company and Teck the remaining 37.6%.
Cost savings of about 800 million US dollars (£589 million) a year will be delivered after the tie-up, according to the firms.
The bulk of the cost savings will come from buying and procurement, marketing-related opportunities and corporate business and other overheads.
The firms said some jobs will be stripped out as they look to remove duplicated roles, although they said it was too early to give numbers of impacted roles.
Anglo added that its London office, where up to 700 staff are employed, will be cut back after the HQ moves to Canada.
Anglo chief executive Duncan Wanblad will head up the merged group, with his counterpart at Teck, Jonathan Price, as deputy chief executive.
Mr Wanblad said: “We are unlocking outstanding value both in the near and longer term – forming a global critical minerals champion with the focus, agility, capabilities and culture that have characterised both companies for so long.
“Having made such significant progress with Anglo American’s portfolio transformation, which has already added substantial value for our shareholders over the past year, now is the optimal time to take this next strategic step to accelerate our growth.
“We have a unique opportunity to bring together two highly-regarded, mining companies whose portfolios and capabilities are deeply complementary, while also sharing a common set of values.”
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