A consortium led by Glencore has agreed to acquire Teck Resources’ steelmaking coal unit for $9 billion, marking one of the largest deals in the mining sector, according to Reuters.
Glencore will own 77% of the business in a $6.9 billion cash deal, while 20% will go to Japan’s Nippon Steel Corp., which already holds a 2.5% stake. South Korea’s POSCO will swap a stake in two of Teck’s coal operations for 3% in the steelmaking coal business Elk Valley Resources.
The transaction is expected to close in the third quarter of 2024.
Glencore said it would demerge the coal units of both companies within 24 months of the acquisition’s completion. The merged coal company will be listed in New York, with secondary listings in Toronto and Johannesburg.
“There’s a potential value creation uplift for our shareholders to demerging coal, including EVR, as opposed to a less certain value creation that would be just demerging our existing coking coal business,” said Glencore CEO Gary Nagle.