The London-listed miner Anglo American has agreed to merge with its Canadian rival Teck Resources, in a deal that will create a $53bn (£39bn) global copper group but raises the prospects of job cuts.
The merger, the biggest mining tie-up in years, would form one of the biggest copper producers in the world, the companies said on Monday.
Anglo American fended off a series of takeover attempts by its larger rival BHP last year, pushing it to radically restructure its business.
The chief executive of Anglo, Duncan Wanblad, said the merger formed “a global critical minerals champion with the focus, agility, capabilities and culture that have characterised both companies for so long”.
“Having made such significant progress with Anglo American’s portfolio transformation … now is the optimal time to take this next strategic step to accelerate our growth,” he said.
Jonathan Price, the chief executive of Teck, will become deputy chief executive of the merged business.
Both bosses, as well as other senior executives, will be based in Canada after the deal, and the global headquarters of the new business will be in Vancouver.
However, the FTSE 100 company said it would retain its primary share listing on the London Stock Exchange and maintain corporate offices in London and Johannesburg. It will also be listed on exchanges in Johannesburg, Toronto and New York.
The merger, which is expected to complete within 12 to 18 months if it is approved by regulators, should generate $800m of annual cost savings within four years.
About $60m of these savings is expected to come from the board and head office, raising the possibility of job cuts as the business pushes for what it called “de-duplication and rationalisation” of the board and executive leadership. A further $150m is expected to come from other corporate and business overheads, where there are “overlapping functions and capabilities” across Anglo and Teck.
Anglo American has been undergoing a radical restructuring in an effort to streamline its focus on iron ore and copper. This year it spun off its platinum mining business, and it has been exploring the potential sale of its renowned diamond business De Beers.
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Anglo American investors will own 62.4% of the new business, while Teck shareholders will have the remaining 37.6%. Their combined market capitalisation is more than $53bn.
Before the deal completes, Anglo American will pay its shareholders a $4.5bn special dividend, or $4.19 a share.
On Tuesday morning, Anglo shares rose 5% in London, while Teck’s Frankfurt-listed stock jumped nearly 22%.
