Mining giant Glencore has made a proposal to buy Teck Resources’ steelmaking coal business as part of an ongoing takeover deal.
Glencore first made an unsolicited takeover bid for the entirety of Teck’s operations in April. Teck rejected the $23bn offer, calling it “unsolicited and opportunistic”.
Under Glencore’s latest proposal it would buy the coal and steelmaking element of Teck’s business, joining the unit with its own demerged energy coal assets two years after the deal closes.
Glencore says that it is “willing to pursue” an full buyout of Teck, according to a statement on its website. Glencore says that it has “strong support” from its shareholders for the proposal.
The proposal would include the acquisition of Canada-based Teck’s metal mines in North America. Glencore says that it is “fully committed to ensuring that the proposed acquisition would benefit Canada and is open to working with Teck to identify a comprehensive suite of commitments for the benefit of all relevant stakeholders”.
It remains unclear whether the deal will go ahead. According to a press release from Teck, the Glencore offer is one of “a number of proposals” under consideration. It continues to say that “there can be no assurance that any transaction will result from the engagement between Teck and the various interested counterparties”. Teck says that it is “still in the process” of determining whether the takeover would be determined “in the best interests of Teck’s shareholders and all stakeholders”.
According to Teck, the offer is “preliminary in detail, conditional and non-binding”. The company will not give further updates “until it determines that a disclosure is required”.
Teck’s initial rejection of the offer came after the company announced plans to separate the steelmaking coal unit from the rest of the business. In April, Teck claimed that Glencore’s offer did not account for the potential future productivity that this could bring.
