Major miner Glencore has confirmed that it has submitted an alternative proposal to Teck Resources’ board of directors to acquire its steelmaking coal business for cash.
Teck Resources is one of Canada’s leading mining companies which specialise in mining commodities such as steelmaking coal, copper, and zinc.
Not long after this, Teck withdrew its proposal to split the company, which industry experts said may cause the coal major to attempt another takeover offer. Now, it has submitted an alternative proposal.
“While Glencore remains willing to pursue its proposed merger demerger, Glencore has made this alternative proposal to acquire (Teck’s steelmaking coal business) as it is expected to allow for a value accretive demerger of the combined coal and carbon steel materials business to its shareholders,” Glencore said in its statement.
The major miner noted its strong support of the transaction from its shareholders and it said if a transaction were to materialise, it would demerge CoalCo once it has sufficiently delivered approximately 12-24 months from close.
“Glencore would manage its post-demerger balance sheet, post servicing its formulaic base distribution, to a revised c.US$5 billion net debt cap, down from the current level of c.US$10 billion, alongside our continued commitment to minimum strong BBB/Baa ratings,” the company said.
Glencore stated its full committed to ensuring the proposed acquisition would benefit Canada and maintained it is open to working with Teck.
“(We are) open to working with Teck to identify a comprehensive suite of commitments for the benefit of all relevant stakeholders which would enhance Teck’s steelmaking coal business existing presence and capital investments in Canada, as well as its community, social, labour and environmental programmes,” Glencore said.