Vancouver-based Teck Resources Ltd. and London-based Anglo American PLC are planning to merge their operations into a combined company called Anglo Teck that will be headquartered in Canada and be one of the world’s largest copper producers. Here’s what you need to know about the deal.

What is Anglo American?

The United Kingdom-based multinational is one of the world’s largest miners, with a diversified portfolio that includes

copper , iron ore, steelmaking coal, nickel, manganese, diamonds and crop nutrients. It was founded in 1917 by Ernest Oppenheimer, a South African diamond and gold mining entrepreneur.

The company has operations around the world, such as its copper projects in South America, steelmaking coal mines in Australia, iron ore in South Africa and nickel in Brazil, while it mines diamonds in Botswana, Canada, Namibia and South Africa.

Anglo American has been looking to reduce its portfolio by primarily focusing on copper, iron ore and crop nutrients, commodities it describes as “future-enabling products” that are essential for decarbonizing the global economy and improving living standards and food security.

As such, it’s in the process of selling its coal and nickel businesses and separating its diamond business, which is run under the De Beers Group. Anglo American owns 85 per cent of De Beers, which produces a third of the world’s rough diamonds by value, it said.

What is Teck?

Teck underwent a series of amalgamations and mergers before becoming Canada’s largest diversified miner. But that status changed in 2023 when the company’s shareholders, including Norman Keevil — who along with his family is credited for Teck’s rise and holds a key vote in such situations — agreed to sell its steelmaking coal business to Glencore PLC to sharpen Teck’s focus on metals such as copper and zinc, commodities necessary for the energy transition from coal.

The company currently operates mines in Canada, the United States, Peru and Chile. Teck’s calling card is its 60 per cent ownership of the Quebrada Blanca copper mine in Chile, which it said has a mining life of 27 years with further potential for expansion.

The project has suffered from operational difficulties, such as cost overruns, but the merger with Anglo American is expected to help address that through synergies with Anglo American’s Collahuasi mine, which is adjacent to Quebrada Blanca, the companies said.

How is the deal structured?

If the all-share merger goes ahead, Anglo American and Teck shareholders will own about 62.4 per cent and 37.6 per cent, respectively, of Anglo Teck. Anglo American will issue 1.33 ordinary shares to existing Teck shareholders in exchange for each outstanding Teck class A common share and class B subordinate voting share.

Anglo American also intends to declare a special dividend of US$4.5 billion, or about US$4.19 per share, for its shareholders ahead of the completion of the merger.

Where will the company be located and who will head it?

Anglo Teck will have its global headquarters in Vancouver, with corporate offices in London and Johannesburg. Anglo American chief executive Duncan Wanblad will lead the merged company, while Teck chief executive Jonathan Price will become deputy CEO. The leadership team will work out of Canada.

What does the deal mean for Canada?

Changes in Canada’s legal structure have made it more difficult for foreign companies to merge with or buy Canadian mining companies that deal with minerals, such as copper or lithium, deemed critical for the economy’s future.

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To satisfy the Canadian government, which will review the deal, the two companies provided a list of benefits for the country, including a commitment to invest at least $4.5 billion in Canada over five years to support various mining projects and create more jobs.

The companies said that a “substantial proportion” of Anglo Teck’s board of directors will be Canadian and the new entity will honour all agreements with communities, Indigenous governments and labour unions in Canada.

The merged company is also expected to maintain employment levels in Canada, with no net reduction in the number of employees as a result of the deal. The company will also be listed on the Toronto Stock Exchange, although the primary listing will be on the London Stock Exchange.

What comes next?

The companies expect the merger to be completed in 12 to 18 months, but it will need approval from the Canadian government under the Investment Canada Act and various jurisdictions globally. It will also need the approval of shareholders.