Teck Resources (TECK) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a world-leading critical minerals producer with over 1.2 million tons of annual copper production, more than 70% copper exposure, and a top five global copper producer status.

• Combination leverages complementary portfolios and technical expertise, enhancing resilience, growth optionality, and market positioning in copper, iron ore, zinc, and crop nutrients.

• Headquarters will be in Vancouver/Canada, with significant leadership and operational presence in Canada, South Africa, and the UK, reflecting both companies' heritage and strategic markets.

• Aims to deliver a differentiated investment opportunity with 72% copper exposure by 2027 and supports national priorities and critical minerals strategies in Canada and South Africa.

• The merger supports the energy transition and economic development by providing critical minerals and metals.

Financial terms and conditions

• Structured as a merger of equals via a plan of arrangement; Anglo American will issue 1.3301 new shares for each Teck Resources share.

• Anglo American shareholders receive a $4.5 billion special dividend ($4.19 per share) ahead of closing.

• Post-merger, Anglo American and Teck shareholders will own approximately 62.4% and 37.6% of the combined entity, respectively.

• The combined entity will be a UK corporation with equal board representation and executive leadership reflecting both organizations.

• Merger subject to customary closing and regulatory conditions, expected to complete in 12-18 months.

Synergies and expected cost savings

• $800 million in pre-tax recurring annual synergies expected, with 80% realized by year two post-completion, primarily from procurement, overheads, and marketing.

• $1.4 billion annual EBITDA uplift from Collahuasi/Quebrada Blanca asset integration, adding ~175,000 tonnes of copper annually from 2030-2049.

• One-off cash synergy of at least $200 million from improved working capital management.

• Estimated one-off cash costs of $700 million for recurring synergies and $1.9 billion for long-term operational synergies.

• Synergies stem from procurement, overhead reduction, marketing, and shared infrastructure.