Glencore set to sweeten bid for Canadian rival Teck Resources
Glencore plans to bid for Canadian rival in battle that could decide mining future
- Glencore has already made a £18.5bn bid for Teck Resources this year
- It was rejected by Teck, who called it a ‘non-starter’
- A merger would be one of the biggest deals this year
Mining giant Glencore plans to raise its bid for Canadian rival Teck Resources in a fight that could decide the future of the industry.
The FTSE 100 group has already made a bid of £18.5 billion this year, which was rejected by Teck, who called it a ‘non-starter’.
But Glencore can ramp up the pressure to force the Canadian company to negotiate.
Any takeover would be heavily scrutinized by Canadian authorities
Teck’s leadership originally planned to split the company into two, focusing on coal and metal mining, respectively.
They reversed in April when that plan failed to receive backing from investors, strengthening Glencore’s hand.
A merger would be one of the biggest deals this year and would define Glencore’s legacy as it aims to create one of the world’s largest miners – and do away with its unpopular but highly profitable coal business.
But the Swiss company’s aggressive pursuit of Teck has led to a tense standoff between the two — as well as with the Canadian government and the mining industry.
Any takeover would come under heavy scrutiny from Canadian authorities, who can block deals and have recently cracked down on foreign investment in the mineral industry. Officials are thought to support Teck’s continued independence.
Glencore also faces Norman Keevil, 84, a Canadian magnate whose shares in Teck give him an effective veto.
His vociferous rejection of the offer irked some investors and he has since softened his tone, saying he “can’t swim against the tide” when most other investors back Glencore.
Given the possibility of a more favorable offer, Teck is in a race against time to come up with a new plan for his company before his rival wins investors over, and has been trying to sell his coal assets.
Glencore declined to comment.