Categories: Market

Glencore mining company ditched Teck

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Mining giant Glencore is facing resistance from its Canadian rival, Teck, with its merger plans.(Archive image)

The Zug-based raw materials group expects $4.25 to $5.25 billion in synergy effects from a possible merger, Glencore said on Monday. A corresponding proposal was submitted to the Teck Resources Board a few days ago.

Specifically, Glencore offers a Glencore share exchange rate of 7.78 per Teck B share. This corresponds to a 22 percent premium on closing prices on March 31. In addition, shareholders will receive 12.73 Glencore shares per A share, corresponding to a 22 percent premium.

If a deal occurs at this swap rate, Glencore shareholders will receive 76 percent of the combined company and Teck shareholders will own 24 percent.

The Canadian mining company’s board of directors initially rejects the offer. The transaction is “not in Teck’s interest,” according to a statement. The board also emphasizes in the letter that “at this time” selling the company is not considered.

The reason for the rejection is that Teck shareholders will be involved in the coal and oil trade if the deal is accepted. This conflicts with Teck’s ESG obligations and involves significant legal risks. Canadians announced in February that they will split their business into coal and base metals. Teck stressed that your own plan carries less risk.

(SDA)

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Source :Blick

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