Teck Resources confirmed on Monday that it was in talks with Glencore over its proposal to buy the steelmaking coal business of the country’s largest diversified mining company, the latest development in a months-long battle over its future.
Vancouver-based Teck said in a statement that Glencore’s bid was one of many “unsolicited indications of interest” it had received from various parties regarding its coal business.
Teck stressed that Glencore’s proposal was “preliminary, conditional and non-binding” and was being assessed along with all other offers by Teck’s board and an independent special committee.
“The high level of interest expressed by a broad range of parties underscores the value of Teck’s high-margin, long-lived steelmaking coal assets,” the company said in its statement, adding that the fact that it being in contact with interested parties does not mean that a transaction will take place.
“Teck does not intend to provide any further updates until it determines that a disclosure is necessary,” she said.
Swiss commodities giant Glencore first launched its hostile $25 billion takeover bid for Teck Resources in early spring, when the Vancouver-based company was in the midst of its own restructuring effort.
Teck is working to separate its coal assets from its base metals business in hopes of expanding copper and zinc production to meet growing global demand for these metals, both of which are used in production of electric vehicles and are considered key resources for the future energy transition.
Teck in April overturned a shareholder vote on its plan to spin off its steelmaking coal business into a separate company, after it emerged it lacked the necessary support for the proposal, and announced that she would pursue another, simpler split.
The move was widely seen as a victory for Glencore, whose initial bid for Teck had been rejected by the company’s board. Glencore had pressured shareholders to vote against Teck’s proposed spin-off, saying it could not proceed with its own unsolicited takeover bid if Teck’s business separation plan was implemented. .
On Monday, Glencore released a new statement confirming that it had submitted a new offer to Teck’s board, this time offering to acquire the steel part of the company’s business for an undisclosed cash amount.
Glencore added that it remained willing to pursue its bid for all of Teck, but had made another bid for the coal business to combine with its own thermal coal assets.
“We also note that shareholders continue to strongly support a transaction between Glencore and Teck,” Glencore said in its statement.
The company said it was “fully committed” to ensuring that the acquisition of the coal business benefits Canada and assured that it was willing to work with Teck “to define a comprehensive set of commitments for the benefit of all relevant stakeholders”.
The unsolicited acquisition by an international giant of Canada’s largest diversified mining company has sparked a sense of economic nationalism. Some observers have pointed out that the acquisition of the Canadian company by Glencore comes just as the government has pledged to put in place a national critical minerals strategy as part of its comprehensive climate plan.
British Columbia Premier David Eby, the Mining Association of B.C., as well as the Greater Vancouver Board of Trade expressed concern about the risk of job losses and questioned Glencore’s performance in environment, security and governance.
Any merger of the two companies will also have to be approved by the federal government. Opposition Leader Pierre Poilievre has called on the government to block any hostile takeover attempts.
Industry Minister Francois-Philippe Champagne has not made a commitment, but has spoken publicly about Teck’s value as a Canadian company.
Teck is controlled by the Keevil family, which owns the company’s Class A shares along with Japan’s Sumitomo Metal Mining.
