Glencore holds back US$2B for Teck Resources as payouts drop – Thomas Biesheuvel (Bloomberg News – August 8, 2023)

Glencore Plc underlined its continued interest in a deal with Teck Resources Ltd. by holding back US$2 billion for a potential purchase of the Canadian miner’s coal business — cash it would otherwise have returned to shareholders.

Glencore disclosed the new deals war chest in its first-half results Tuesday, as it joined rival miners in reporting a steep drop in profits after a retreat in commodity prices combined with a return to more normal trading conditions, following 2022’s wild swings.

The Swiss company earlier this year made an unsolicited offer to buy all of Teck and then split their combined metals and coal businesses, which was repeatedly rejected. In June, it proposed buying Teck’s steelmaking coal business for about $8 billion as an alternative to its full takeover bid — still with the intention of spinning off the merged coal operations within a year or two.

The takeover fight with Teck has marked the first time that Glencore — one of the world’s biggest coal producers — has explicitly opened the door to exiting the business in the short term. It’s also representative of a wider return to merger and acquisition activity across the industry, as mega miners seek to expand in the metals needed for the shift to clean energy.

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