A new trend in mergers and acquisitions in the natural resources sector was recently consummated after Canada’s largest miner Teck Resources finally agreed to sell a major portion of its coal business to Swiss mining company Glencore.
Actually, Glencore was able to acquire only a 77% interest in Teck’s coal business while ownership of the remaining portion will go to Japan’s Nippon Steel Corporation and South Korea’s Posco Holdings. Many saw it as a takeover battle since the Vancouver-based mining firm had initially rejected Glencore’s offer of $23 billion for the Canadian firm’s entire diverse mining operations.
Although the Canadian firm had rejected Glencore’s offer. it had stirred the board members to consider ridding itself of its exposure to the pollution-producing coal mining business. A spokesperson for the Canadian mining firm said that they plan to pay off debts and give shareholders return value on their investments. Thereafter, the company will use the remaining funds to construct new metal mines.
Glencore’s Acquisition Will See Completion by Year 2025
Glencore’s acquisition deal is yet to close in the third-quarter of 2025. In the meantime Teck Resources will continue to carry on with the coal mining operations for which the firm is expected to earn around $1 billion before the acquisition is rendered final and complete.
Glencore’s Chief Executive Gary Nagle commented in a conference call that they have done very well with the acquisition, and not a second prize achievement. The remark was made in connection with the Swiss company’s almost year-long battle to acquire Teck Resources.
