Teck Resources, Antofagasta Said to Explore Copper Mining Merger
2015-03-30 18:38:51.762 GMT
By Matthew Campbell, Dinesh Nair and Jeffrey McCracken
(Bloomberg) -- Teck Resources Ltd. and Antofagasta Plc are
exploring a merger that would create one of the world’s largest
copper producers, people with knowledge of the matter said.
The companies have held early-stage talks, and any
agreement hinges on the approval of the families that control
both miners, the people said, asking not to be identified
discussing private information. There’s no guarantee they will
reach a deal, which would be primarily stock based, the people
said.
A combination of Teck, based in Vancouver, and London-based
Antofagasta would be the first major mining transaction since an
across-the-board slump in commodity prices hammered the
industry. Both companies have extensive copper operations in
Chile which could be combined by a merger, potentially reducing
costs.
Representatives for both companies declined to comment.
With a market value of about C$10 billion ($8 billion),
Teck is Canada’s third-largest mining group after Goldcorp Inc.
and Barrick Gold Corp. It’s backed by the Keevil family and
Japan’s Sumitomo Metal Mining Co. Antofagasta, which is
controlled by Chile’s Luksic family, is listed in London and has
a market value of about 7.3 billion pounds ($10.8 billion).
A purchase of either company would be one of the mining
industry’s largest deals over the past five years, data compiled
by Bloomberg show, topping acquisitions by Newcrest Mining Ltd.
in 2010 and Barrick Gold Corp. the next year.
Mining acquisitions were on the rise in 2011 and 2012, when
producers were benefiting from a seemingly insatiable appetite
for raw materials out of China and other emerging markets.
Commodities prices have since slumped due to an oversupply of
everything from oil and gas to copper -- a decline that’s left
many of the earlier deals looking too expensive.
Copper has fallen about 8 percent in the past 12 months,
and hit a five-year low in January. Despite the weak prices,
Teck Chief Executive Don Lindsay sees a significant production
deficit emerging by 2017, he said in a March 3 interview in
Toronto.
For Related News and Information:
Too Much of Everything Spurs Commodity Exodus as Price Wars Rage
Teck’s Lindsay Seeks Copper-Mining Deal Amid Price Slump
Top Stories:TOP<GO>
--With assistance from Scott Deveau and Liezel Hill in Toronto,
Matt Craze in Santiago and Ruth David in London.
To contact the reporters on this story:
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net;
Dinesh Nair in London at +44-20-3525-3212 or
dnair5@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net;
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net
Elizabeth Fournier
2015-03-30 18:38:51.762 GMT
By Matthew Campbell, Dinesh Nair and Jeffrey McCracken
(Bloomberg) -- Teck Resources Ltd. and Antofagasta Plc are
exploring a merger that would create one of the world’s largest
copper producers, people with knowledge of the matter said.
The companies have held early-stage talks, and any
agreement hinges on the approval of the families that control
both miners, the people said, asking not to be identified
discussing private information. There’s no guarantee they will
reach a deal, which would be primarily stock based, the people
said.
A combination of Teck, based in Vancouver, and London-based
Antofagasta would be the first major mining transaction since an
across-the-board slump in commodity prices hammered the
industry. Both companies have extensive copper operations in
Chile which could be combined by a merger, potentially reducing
costs.
Representatives for both companies declined to comment.
With a market value of about C$10 billion ($8 billion),
Teck is Canada’s third-largest mining group after Goldcorp Inc.
and Barrick Gold Corp. It’s backed by the Keevil family and
Japan’s Sumitomo Metal Mining Co. Antofagasta, which is
controlled by Chile’s Luksic family, is listed in London and has
a market value of about 7.3 billion pounds ($10.8 billion).
A purchase of either company would be one of the mining
industry’s largest deals over the past five years, data compiled
by Bloomberg show, topping acquisitions by Newcrest Mining Ltd.
in 2010 and Barrick Gold Corp. the next year.
Mining acquisitions were on the rise in 2011 and 2012, when
producers were benefiting from a seemingly insatiable appetite
for raw materials out of China and other emerging markets.
Commodities prices have since slumped due to an oversupply of
everything from oil and gas to copper -- a decline that’s left
many of the earlier deals looking too expensive.
Copper has fallen about 8 percent in the past 12 months,
and hit a five-year low in January. Despite the weak prices,
Teck Chief Executive Don Lindsay sees a significant production
deficit emerging by 2017, he said in a March 3 interview in
Toronto.
For Related News and Information:
Too Much of Everything Spurs Commodity Exodus as Price Wars Rage
Teck’s Lindsay Seeks Copper-Mining Deal Amid Price Slump
Top Stories:TOP<GO>
--With assistance from Scott Deveau and Liezel Hill in Toronto,
Matt Craze in Santiago and Ruth David in London.
To contact the reporters on this story:
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net;
Dinesh Nair in London at +44-20-3525-3212 or
dnair5@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net;
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net
Elizabeth Fournier