Teck Resources Ltd. has agreed to sell its coal business to Swiss commodities trading giant Glencore PLC and two Asian steelmakers, in a US$8.9-billion transaction that requires federal approval, and will be closely scrutinized by Ottawa before it can proceed.
Vancouver-based Teck has been fielding offers for its core metallurgical coal business since the spring, when an earlier plan to spin it off was cancelled at the eleventh hour because of insufficient shareholder support. Founded in 1913, Teck is Canada’s largest diversified mining company, a major employer in British Columbia and one of the oldest miners in the country.
Glencore originally proposed buying all of Teck in April, including the company’s copper and zinc mines, in what would have been a US$23.1-billion cash and stock deal. Teck repeatedly rejected Glencore’s advances, citing a number of risks – some jurisdictional, some related to the deal’s execution and some related to concerns about Glencore’s past bribery and market manipulation settlements with international regulators.
In an interview with The Globe and Mail, Jonathan Price, Teck’s chief executive officer, called the deal to sell the coal business a “very different transaction.”
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