OPINION: Glencore’s pitch puts Teck’s future in doubt – Andrew Willis (Globe and Mail – April 4, 2023)


Glencore chief executive Gary Nagle is clearly a student of Canadian corporate history. The Swiss CEO knows that in recent years, investors willingly sold the heart and soul of the domestic mining industry – global players Inco, Falconbridge and Alcan – for just a few dollars more than where their stocks were trading. In asset management, performance trumps nationalism every time.

After three years of unsuccessful merger talks with Teck Resources Ltd. TECK-N, Mr. Nagle is now bringing the same dynamic to bear to what’s become the country’s flagship base metal miner. With Vancouver-based Teck in the midst of a complex restructuring that’s received lukewarm reviews, Glencore GLNCY pitched a simpler transaction on Monday that has a greater short-term upside.

Teck’s future, supposedly assured because of family control of the company, is suddenly very much in doubt. Teck is vulnerable because investors were underwhelmed by February’s announcement of plans to spin off the company’s British Columbia steelmaking coal mines into a new TSX-listed company, Elk Valley Resources Ltd.

The complexity in the deal includes an agreement that sees Teck receive a minimum of $14-billion in cash from Elk Valley over up to 11 years, through royalty payments.

For the rest of this column: https://www.theglobeandmail.com/business/commentary/article-glencores-pitch-puts-tecks-future-in-doubt/