Try our mobile app
GLENCORE PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
ISIN: JE00B4T3BW64
LEI: 2138002658CPO9NBH955
Baar, Switzerland
03 April 2023
Proposal for a merger between Glencore and
Teck and simultaneous demerger of combined
coal business
o The proposed transaction would create two standalone companies with substantially
larger and more diversified portfolios of assets than those of the proposed Teck Metals
and Elk Valley Resources
o MetalsCo to be a world-class standalone base metals business with a diversified
portfolio and a leading position in the critical minerals required for the energy
transition
o CoalCo to be a highly cash-generative standalone coal and carbon steel materials
business; unlike Elk Valley Resources, CoalCo would have no ongoing financial
obligations to MetalsCo
o Combination exchange ratio of 7.78 Glencore shares per Teck B share, which
represents a valuation premium of 22% based on Glencore’s and Teck B’s undisturbed
last close prices as of 31 March 2023, being the last close prior to the proposal becoming
public and 20% based on Glencore’s and Teck B’s last close prices as of 24 March 2023,
being the last close before the date of the proposal to Teck
o Glencore and Teck shareholders would own approximately 76% and 24% of the merged
entities, respectively
o US$4.25 – 5.25 billion of estimated post-tax synergy value
o Glencore and Teck shareholders would be well positioned to participate in valuation re-
rating over time
o MetalsCo Industrial Head Office to be located in Canada, managing approximately 3x
Teck’s current metals production. Full commitment to continue Teck’s legacy in, and
deliver real benefits to, Canada.
Follow us on social media:
Page 2
Glencore plc (“Glencore”) confirms that it submitted a proposal to the Board of Directors of
Teck Resources Limited (“Teck”) on 26 March 2023 to merge with Teck and to simultaneously
demerge their combined metals and coal businesses (the “Proposed Merger Demerger”) to
create:
• MetalsCo: a world-class standalone transition metals focused business with a diversified
portfolio comprising Glencore’s and Teck’s metals and minerals assets, Glencore’s metals
and energy (excluding coal) marketing, recycling and distribution businesses and its
investment in Viterra. The investment in Viterra would be subject to a strategic review
and potential divestment.
• CoalCo: a highly cash-generative standalone coal and carbon steel materials business
comprising Glencore’s and Teck’s coal assets, Glencore’s ferroalloys assets and
Glencore’s coal and ferroalloys marketing businesses.
Glencore is proposing a combination exchange ratio of 7.78 Glencore shares per Teck B share,
which represents a valuation premium of:
• 22% based on Glencore’s and Teck B’s undisturbed last close prices as of 31 March 2023,
being the last close prior to the proposal becoming public;
• 20% based on Glencore’s and Teck B’s last close prices as of 24 March 2023, being the
last close before the date of the proposal to Teck;
• 20% based on Glencore’s and Teck B’s three-month VWAPs as of 24 March 2023; and
• 30% based on Glencore’s and Teck B’s twelve-month VWAPs as of 24 March 2023.
In addition, Glencore is proposing a combination exchange ratio of 12.73 Glencore shares per
Teck A share, which represents a valuation premium of:
• 22% based on Glencore’s and Teck A’s undisturbed last close prices as of 31 March 2023;
• 20% based on Glencore’s and Teck A’s last close prices as of 24 March 2023;
• 43% based on Glencore’s and Teck A’s three-month VWAPs as of 24 March 2023; and
• 73% based on Glencore’s and Teck A’s twelve-month VWAPs as of 24 March 2023.
At these proposed exchange ratios, Glencore and Teck shareholders would own
approximately 76% and 24% of the merged entities, respectively.
Glencore believes that the Proposed Merger Demerger is compelling and would create
significant value for both Teck and Glencore shareholders. The Proposed Merger Demerger
would create two standalone companies with substantially larger and more diversified
portfolios of assets than those of the proposed standalone Teck Metals and Elk Valley
Resources.
MetalsCo would be a must-own global base metals company with a Tier 1 portfolio of copper
assets, an unrivalled suite of copper growth opportunities as well as being a leading supplier
of cobalt, zinc and nickel, well positioned to meet the demand required for the energy
transition. In 2022, MetalsCo would have generated approximately US$16 billion of proforma
EBITDA.
CoalCo would be a leading, highly cash-generative, diversified coal producer that would be
able to sustain an attractive cash flow payout to investors through the cycle. In 2022, CoalCo
would have generated approximately US$26 billion of proforma EBITDA. Further, unlike the
proposed Teck separation, the Proposed Merger Demerger would not require any
intercompany financial arrangements between the metals and coal businesses going forward;
shareholders of CoalCo would participate in the business’ cash flow generation immediately
upon close.
Page 3
Each of MetalsCo and CoalCo would be uniquely positioned within their respective peer
groups from an asset quality, scale and diversification perspective, to provide their
shareholders with highly liquid exposure to Tier 1 assets and, in the case of MetalsCo, a leading
growth pipeline. Glencore and Teck shareholders would be well positioned to participate in a
valuation re-rating over time.
The scale and quality of Glencore’s business, together with its uniquely complementary
footprint and strategic fit with Teck, including its strong and demonstrable commitment to
being a responsible and ethical operator, make Glencore the obvious partner for an all-share
merger with Teck, and a simultaneous demerger.
Given the complementary nature of Glencore’s and Teck’s portfolios, the Proposed Merger
Demerger is expected to unlock approximately US$4.25 – 5.25 billion of post-tax synergy value
(on an NPV basis) across marketing, operating and overhead optimisation, which would be
shared by both Teck and Glencore shareholders.
Glencore has deep respect for Teck’s legacy in Canada as well as its strong technical expertise
and would recognise and reflect these strengths in any transaction. Glencore’s Canadian
assets form a significant part of Glencore’s global business and have a history that dates back
more than 100 years. Glencore employs around 9,000 people in Canada, including contractors.
The Proposed Merger Demerger would deliver real benefits to Canada.
As part of the Proposed Merger Demerger, Glencore would agree to:
• designate either Teck’s Vancouver or Glencore’s Toronto office as MetalsCo’s global
Industrial Head Office, which would manage approximately 3x Teck’s current metals
production;
• maintain significant Canadian representation on each of MetalsCo’s and CoalCo’s Board
of Directors;
• ensure that Canadians continue to serve in the management of MetalsCo’s and CoalCo's
Canadian assets;
• provide ongoing and long-term employment in Canada for Canadians; the Proposed
Merger Demerger would not materially change the day-to-day operations at Teck’s
assets in Canada;
• maintain a listing of MetalsCo and CoalCo on the TSX;
• continue to invest in Canadian capital expenditure programmes in each of MetalsCo and
CoalCo and make new investments in a reinvigorated exploration program in Canada;
• honour all of Teck’s commitments to local Canadian communities as well as to
Indigenous communities to ensure their interests are acknowledged and protected; and
• honour all of Teck’s social, labour and environmental programs in Canada.
Glencore remains committed to supporting the goals of the Paris Agreement and intends to
respect the net zero climate strategy Teck has announced in respect of its steelmaking coal
operations.
In addition, Glencore intends that CoalCo would oversee a responsible decline of its thermal
coal portfolio production in line with Glencore’s current ambition to achieve net zero by 2050,
with a supportive policy environment. Glencore also intends for CoalCo to continue to uphold
Glencore’s commitment to responsible operating practices. Further study of the emissions
pathway of the combined companies would be required in order to establish revised
combined targets.
Page 4
The implementation of the proposal is subject to the Board of Directors of Teck agreeing to
implement the proposal through a Plan of Arrangement, which would then be subject to
regulatory and shareholder approvals.
There can be no certainty that any transaction will result from Glencore’s approach to Teck
and any subsequent discussions.
The full text of the letter from Glencore to the Teck Board is available on our website.
For further information please contact:
Investors
Martin Fewings t: +41 41 709 28 80 m: +41 79 737 56 42 martin.fewings@glencore.com
Media
Charles Watenphul t: +41 41 709 24 62 m: +41 79 904 33 20 charles.watenphul@glencore.com
www.glencore.com
This announcement contains inside information.
Glencore LEI: 2138002658CPO9NBH955
Notes for Editors
Glencore is one of the world’s largest global diversified natural resource companies and a major
producer and marketer of more than 60 commodities that advance everyday life. Through a network of
assets, customers and suppliers that spans the globe, we produce, process, recycle, source, market and
distribute the commodities that support decarbonisation while meeting the energy needs of today.
With around 140,000 employees and contractors and a strong footprint in over 35 countries in both
established and emerging regions for natural resources, our marketing and industrial activities are
supported by a global network of more than 40 offices.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power
generation, battery manufacturing and oil sectors. We also provide financing, logistics and other
services to producers and consumers of commodities.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the
International Council on Mining and Metals. We are an active participant in the Extractive Industries
Transparency Initiative.
We recognise our responsibility to contribute to the global effort to achieve the goals of the Paris
Agreement by decarbonising our own operational footprint. We believe that we should take a holistic
approach and have considered our commitment through the lens of our global industrial emissions.
Against a 2019 baseline, we are committed to reducing our Scope 1, 2 and 3 industrial emissions by 15%
by the end of 2026, 50% by the end of 2035 and we have an ambition to achieve net zero industrial
emissions by the end of 2050. For more detail see our 2022 Climate Report on the publication page of
our website at glencore.com/publications.
www.facebook.com/glencore
www.instagram.com/glencoreplc
www.linkedin.com/company/glencore
www.twitter.com/glencore
www.youtube.com/glencorevideos
Page 5
Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities.
In this document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are
made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only
and do not imply any other relationship between the companies. Likewise, the words “we”, “us” and “our” are also
used to refer collectively to members of the Group or to those who work for them. These expressions are also used
where no useful purpose is served by identifying the particular company or companies.
Sponsor
Absa Corporate and Investment Bank, a division of Absa Bank Limited
