MW $53 billion mega-merger with Teck transforms Anglo American from prey to predator

By Jules Rimmer

Tech Resources and Anglo American own neighboring copper mines in Chile where cooperation and synergies can lead to enormous cost savings

Something had to change at Anglo American. In the last three years its stock had almost halved, fellow mining giant BHP unsuccessfully attempted to buy it for $49 billion in 2024 and around the same time, the activist hedge fund Elliott Management, not known for their patience with incumbent management teams, took a 2.5% stake.

Now, it's clearly the dominant partner in what's been labeled a merger of equals with Canada's Teck Resources $(TECK)$ (CA:TECK.A) in a "zero-premium transaction" worth $53 billion at Monday's closing prices. The U.K. broker AJ Bell thinks that "Anglo has not only pulled itself out of a hole, but also sends a message to mining peers that it is not a pushover."

Teck shares jumped 11% to $39 in premarket trade.

Anglo American (UK:AAL) shares climbed 10% in London trade.

Market speculation Tuesday morning suggested the deal might have been engineered to deter any future overtures from BHP. Unsurprisingly, Anglo's management prefers to emphasize the synergistic benefits of the deal, citing the $800 million of cost savings the company expects to make.

The merger unites two major copper producers, with neighboring flagship mines in Chile, to create one of the world's top five in the sector with Anglo controlling 62.4% of the company and Teck 37.6%. The stated aim is to establish a cleaner, more streamlined copper-focused entity, mining a metal of demonstrable strategic value in the next several years.

The behind-the-scenes influence of Elliott can probably be indicated, though, by the payment of a special dividend to Anglo American shareholders worth $4.5 billion or GBP3.08 per share, providing a yield of roughly 12% on Tuesday morning's trading price.

Elliott will presumably be urging Duncan Wanblad, CEO of Anglo and the pro forma merged entity, to streamline its operations by divesting its majority stake in diamond producer De Beers. Lab-grown diamonds have caused a collapse in prices and AJ Bell points out, "Anglo failed to spot this threat... and hung on for too long."

Elliott have not yet replied to a request for comment.

That there is value to be extracted from Teck Resources is obvious. A note, upgrading the stock to a buy recommendation, was published by Deutsche Bank's Liam Fitzpatrick on Monday. He noted Teck's lagging share price, "rock-bottom investor sentiment" and "the compelling value opportunity" presented by "shares trading below greenfield replacement cost at a wide discount to global peers" in a sector where strategic assets are prized.

Deutsche Bank's target price for Teck shares listed in New York was $42.

Going forward, what will be called Anglo Teck will retain its primary listing in London but maintain secondary listings in Johannesburg, New York and Toronto.

-Jules Rimmer

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September 09, 2025 06:12 ET (10:12 GMT)

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