Anglo American (AAL) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a world-leading critical minerals producer with over 70% copper exposure, ranking among the top five global copper producers and leveraging complementary portfolios and operational strengths.

• Combined entity will have a diversified asset base, including world-class copper, premium iron ore, and zinc operations, with significant growth optionality in brownfield and greenfield projects.

• Headquarters will be in Vancouver, with significant presence in Canada, South Africa, and the UK, supporting global mining finance and technical expertise.

• The merger aligns with both companies' strategies to focus on copper and critical minerals, supporting the energy transition, economic development, and national priorities in Canada and South Africa.

• Strategic fit leverages complementary assets, growth pipelines, and geographic diversification.

Financial terms and conditions

• Anglo American will issue 1.3301 new shares for each Teck Resources share; Anglo American shareholders receive a $4.5 billion special dividend ahead of closing.

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

• The merger is structured as a plan of arrangement under Canadian law, with exchangeable shares available for eligible Canadian shareholders.

• The new entity will be a UK corporation with equal board representation and maintain listings in London, Johannesburg, Toronto, and New York.

• Board to be composed 50% from each company, with leadership roles shared and executive team reflecting both firms.

Synergies and expected cost savings

• $800 million in pre-tax recurring annual synergies expected, with 80% realized by year two and full realization by year four post-completion.

• Integration of Collahuasi and Quebrada Blanca assets expected to deliver $1.4 billion annual EBITDA uplift and 175,000 tonnes of incremental copper production from 2030.

• One-off cash synergy of at least $200 million from working capital improvements expected within three years.

• Realization of synergies will require $700 million in one-off costs for recurring synergies and $1.9 billion for long-term operational synergies.

• Synergies stem from operational efficiencies, procurement, marketing, and shared infrastructure.