Ask around about the upcoming merger between Vancouver-based Teck Resources and London-based Anglo American, and you’ll get two predictable responses. One is that there’s very little incentive to go on the record about such a huge future part of the Canadian business landscape. The other is that, while this deal may come with some partial downsides for Canada, it’s also better than the most likely alternatives.
“I think it’s a good deal for Canada,” says John Steen, a UBC professor and an expert in global mining futures. “I think the worst outcome would have been losing Teck offshore as we’ve lost other Canadian mining companies in the past.”
Among those looking at the long-term trends in Canada’s mining sector, that is often their real concern.
The Anglo-Teck deal itself would lead to one of the biggest copper producers in the world, with a combined market cap of over $100 billion. To woo the Canadian government into approving the merger, negotiators have agreed that Anglo-Teck will spend at least $4.5 billion in Canada within its first five years of operation, including on construction, education, mining exploration and overall research and development.
Critics of the deal were not, in general, concerned about investment or even philanthropy, however; instead, they wanted to know that the merger was not simply a foreign acquisition by another name. They thought back to deals like the acquisition of Canada’s Falconbridge by Switzerland’s Xstrata, which saw the newly created giant run out of Swiss offices in Zug.
That’s why both Teck and Anglo American have been doggedly referring to the deal as a “merger of equals,” looking to head off criticisms that the larger British side of the new company will end up running the Canadian side, from afar.
“Our goal,” says Jonathan Price, president and CEO of Teck Resources, “is to take the best from both companies and combine those capabilities in a way that creates even greater value. Not just for shareholders, but for employees, communities and the countries where we operate. It is a clear case of one plus one equals three.”
That sounds like a perfect arrangement, but when legislators learned that Anglo-Teck would be officially “domiciled” in London, not Vancouver, they raised concerns.
A London-domiciled Anglo-Teck would mean that, while the company could be listed on the Toronto Stock Exchange (TSX) as a normal financial product, it could not be listed on the highly impactful S&P/TSX Composite Index. Despite promises to be organizationally headquartered in Vancouver, Anglo-Teck’s financial incorporation in Britain will force TSX index investors to divest themselves of millions of shares in Teck Resources.
According to Steen, however, it’s important to remember that decision-making power mostly goes to the country with the official headquarters, not the country of financial incorporation. “We will actually see executives being in Vancouver,” he says, “which has great implications for what happens in B.C. and Canadian mining.”
According to Price, a post-merger Anglo-Teck “will be the largest-ever company headquartered in Vancouver, and the largest critical minerals company based in Canada.”
That’s all part of the company’s continuing strategy of investing in the future of electrification. “That strategy was focused on simplifying our portfolio,” says Price, “to focus on the metals essential for electrification and advanced technologies—particularly copper.”
Interestingly, Teck has a unique ownership structure that empowers the shares held by members of the founding family, the Keevils, when it comes time to take shareholder votes. As a result, any merger or acquisition involving Teck had to appease the Keevils’ interests, which have been expressed as supportive of Canadian sovereignty.
In 2023, Glencore (which is actually a renamed Xstrata) actually approached Teck about an acquisition, but was rebuffed at least in part because of the internationalist nature of the proposal. Glencore ended up purchasing only Teck’s steelmaking coal operations, but even that required several commitments, such as remaining headquartered in Canada and maintaining a Canadian majority in management, both for a minimum of 10 years.
“We should be very thankful to the Keevils for structuring it the way they have,” Steen says, “because otherwise it probably would have just been taken over by a BHP or a Glencore.”
Not everybody sees it the same way. Pierre Lassonde, co-founder of Toronto-based gold producer Franco-Nevada, refuses to differentiate between this merger and a foreign takeover. Last year, he called the deal a “tragedy” for Canadian mining, framing the deal as Canada having lost Teck to the United Kingdom.
The question isn’t whether Canada is giving up some measure of control over Teck, though, but whether Teck’s unusual ownership structure could actually have protected it from a true foreign takeover, forever.
In the last decade, Canada has seen the foreign takeover of Falconbridge, Inco and Alcan, along with the oil and gas company Nexen: four of the biggest resource producers in the country. Without this Anglo American “merger of equals,” it’s entirely possible that Teck would have eventually been subject to the same sort of merger of domination as so many other Canadian companies before it.
There’s also the potential positive impact of putting more capital and clout at Teck’s disposal. A large multinational simply commands more power than a smaller, domestic one, and that could have big implications for development. The Galore Creek area could be developed into a mine with national-scale outputs of gold and copper, for instance, if the Anglo merger produces a new infusion of cash to fund development.
Teck also has a smelting operation in Trail that provides in-country minerals processing and also produces critical minerals like germanium. With the combined capital of Anglo and Teck, that operation could be expanded to strengthen Canada’s base in downstream minerals processing, which is a key part of overall resource independence.
There are also synergies to be found between Teck and Anglo American mining operations outside of Canada, including Teck’s Quebrada Blanca mine and the adjacent Anglo American Collahuasi mine in Chile. “One of the world’s most prolific copper districts, [it] is the fastest route to copper production growth with the lowest risk, lowest capital-intensity and highest return of any alternative available to either operation. That’s the equivalent of building an entire new major mine—at a much lower cost and complexity,” says Price.
Ultimately the Anglo-Teck merger was approved by the Canadian authorities, but it could still run afoul of the interests of yet another foreign country: China. Anglo and Teck have received approval from every country in which they operate, from Canada and the U.K. to Chile and South Korea. China is the only remaining holdout territory—and just that one jurisdiction could tank the global deal. Still, executives on the Anglo-Teck merger team expect Chinese approval to come down sometime between September and March of next year.
It’s a stark reminder of just how globalized the mining sector has become: it’s an industry in which all internal Canadian disputes can be settled, only for an outside territory to hand down the final decision for the country.
“I don’t think we could deal with another loss of a Canadian company to a foreign multinational, with their headquarters taken offshore,” says Steen. “I think that would have been quite disastrous.”
As it is, the quickly-oncoming Anglo-Teck behemoth will be watched closely over its first few years of operations; if the deal is deemed to have successfully generated an infusion of foreign cash while maintaining the sovereign nature of company decision-making, it could represent a new path to regulatory approval for foreign moves into Canada—and a new financial model for Canadian mining.
Mining Mergers and Acquisitions That Defined Canadian Business: The Last 25 Years
- 2001 – Canadian Barrick Gold acquires American Homestake Mining
- Deal size: $3.5 billion
- 2005 – Canadian Noranda and Falconbridge merge into Falconbridge
- Deal size: ~$7 billion
- 2006 – Canadian Barrick Gold acquires Canadian Placer Dome
- Deal size: ~$12 billion
- 2006 – Swiss Xstrata acquires Canadian Falconbridge
- Deal size: ~$21 billion
- 2007 – Brazilian Vale acquires Canadian Inco
- Deal size: ~$20 billion
- 2007 – British Rio Tinto acquires Canadian Alcan, becoming British Rio Tinto Alcan
- Deal size: ~$40 billion
- 2008 – Canadian Teck Resources acquires Canadian Fording Coal
- Deal size: ~$15 billion
- 2013 – Swiss Glencore acquires Swiss-Canadian Xstrata
- Deal size: ~$30 billion
- 2023 – Swiss Glencore acquires Canadian Teck Resources’ coal mining operations
- Deal size: ~$9.5 billion
- 2027 – British Anglo American merges with Canadian Teck Resources
- Deal size: >$100 billion
