Glencore announced that it has proposed Teck Metals, a merger between the two companies, followed by a simultaneous demerger to create two separate companies in a statement issued on 3 April 2023.
“The proposed transaction would create two stand-alone companies with much larger and more diversified asset portfolios than the proposed Teck Metals and Elk Valley resources,” the statement said.
The first company to be created is MetalsCo, a stand-alone world-class base metals business with a diversified portfolio and a leading position in the critical minerals needed for the energy transition. The second, CoalCo, will be a stand-alone cash-generating coal and carbon steel materials business.
CoalCo would have no ongoing financial obligations to MetalsCo. Glencore and Teck shareholders would be well placed to participate in the re-evaluation of the valuation over time. MetalsCo’s industrial headquarters will be located in Canada and will manage approximately 3 times Teck’s current metal production. Full commitment to continue Teck’s legacy in Canada and provide real benefits. The statement states that Glencore confirms that it has submitted this proposal to the Board of Directors of Teck Resources Limited on March 26, 2023 with a view to the merger and demerger. Implementation of the proposal is subject to the Teck board agreeing to implement the proposal by way of a plan of arrangement, which would then be subject to regulatory and shareholder approvals.
Glencore believes that the proposed demerger is compelling and would create significant value for both Teck and Glencore shareholders.
Glencore is one of the world’s largest diversified natural resources companies and a leading producer and marketer of more than 60 commodities that improve everyday life. Through a network of assets, customers and suppliers spanning the globe, we produce, process, recycle, procure, market and distribute the products that support decarbonisation while meeting today’s energy needs. With approximately 140,000 employees and contractors and a strong presence in more than 35 countries in established and emerging natural resource regions, our marketing and manufacturing activities are supported by a global network of more than 40 offices.
Summary by Elie KABORE
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