In what promises to be one of the largest mining deals ever, Teck Resources and Anglo American announced a ~$75B “merger of equals” - creating a top 5 copper producer globally…

… and unlocking $800M of run-rate synergies through the usual levers (cost rationalization, scale advantages, etc.), with an additional $1.4B of EBITDA potential through a combination of the Chilean operations…

… that have given Teck headaches in recent years. Its QB2 mine saw huge cost overruns and is currently underperforming, with reliability issues impacting production alongside weak recovery rates…

… that have been a major source of investor frustration, making this an opportunistic deal for Anglo - who sits at 62% ownership of the combined company even after a US$4.5B special dividend.

The only thing equal about this merger is the board composition, which is split 50/50 to keep Canadian regulators happy. Even with that, reaching a close isn’t a sure thing - with a lengthy 12-18 month review process and the potential for competing bids.

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