Glencore plc confirmed that it submitted a proposal to Teck Resources Ltd. on March 26, 2023, to merge with Teck and to simultaneously demerge their combined metals and coal businesses to create MetalsCo and CoalCo. The proposed transaction would create two standalone companies with substantially larger and more diversified portfolios of assets than those of the recently proposed Teck Metals and Elk Valley Resources (EVR).
The vision for MetalsCo would be a metal mining business with a diversified portfolio comprising Glencore’s and Teck’s metals and minerals assets, Glencore’s metals and energy (excluding coal) marketing, recycling and distribution businesses and its investment in Viterra.
The company said its investment in Viterra would be subject to a strategic review and potential divestment.
CoalCo would be a standalone coal and carbon steel materials business comprising Glencore’s and Teck’s coal assets, Glencore’s ferroalloys assets and Glencore’s coal and ferroalloys marketing businesses.
The Glencore and Teck shareholders would own approximately 76% and 24% of the merged entities, respectively.
MetalsCo would have a Tier 1 portfolio of copper assets, a full suite of copper growth opportunities as well as being a leading supplier of cobalt, zinc and nickel, well positioned to meet the demand required for the energy transition.
As part of the proposal, Glencore would agree to designate either Teck’s Vancouver or Glencore’s Toronto office as MetalsCo’s global head office, which would manage approximately three times Teck’s current metals production.
Implementation of the proposal is subject to Teck’s board agreeing to implement the proposal through a plan of arrangement, which would then be subject to regulatory and shareholder approvals.
