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

… and unlocking $800M of run-rate synergies through the usual levers (headcount reductions, 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.

Just a month after signing, the plug got pulled on MDA Space’s ~$2B satellite constellation deal with EchoStar - knocking 20-40% out of the backlog and 25% off of MDA’s share price.

Immediately after the deal was first announced, NTM EBITDA estimates jumped 8% and shares ran ~10%, so the pullback looks aggressive at first glance…

… with over two turns of multiple compression from pre-deal levels.

But the competitive dynamics behind the termination warrant a haircut, with SpaceX acquiring EchoStar’s spectrum licenses and contracting out the network - waking the market up to the threat of a vertically integrated solution…

… that’s likely to pull some prospective network operators away from the ownership model that MDA has a strong foothold in.

The risk isn’t existential, especially given the geopolitical climate…

… and there’s plenty of activity across the industry - with management reaffirming its full-year guide, $13B satellite opportunity set, and hinting at another constellation deal over the next year.

Strathcona (SCR) has upped its original offer for MEG Energy (MEG), raising the price to nearly $31 per share - a ~10% premium to the Cenovus (CVE) offer MEG’s board accepted late last month.

Cenovus had some news of its own, selling its stake in WRB Refining for $1.9B - with proceeds to go towards leverage reduction and buybacks, adding support to the 25% stock portion of its bid for MEG.

As the September 15th vote nears, MEG shareholders have two choices: cash out (Cenovus deal), or own a scaled SAGD operation (Strathcona deal). The tug of war continues…

Flagging the sale at ATS Corp. (ATS), as it’s the first since a string of insider buying to calm the market after CEO Andrew Hider’s departure.

BRP Inc. (DOO) lost 4% on a bought deal secondary offering priced at $90.71 per share. Bain’s likely using recent strength in shares to take some chips off the table and with a 14% stake remaining, the market is thinking about more selling pressure.

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