Teck Resources' Highland Valley Copper Mine near Logan Lake, B.C. The all-stock takeover of Vancouver-based Teck is worth about US$20-billion.DARRYL DYCK/The Canadian Press
Prime Minister Mark Carney told Anglo American PLC NGLOY that it had to move its headquarters to Canada or its proposed acquisition of Teck Resources Ltd. TECK-B-T would not be allowed to proceed, two sources familiar with the matter told The Globe and Mail.
London-based Anglo last week unveiled an all-stock takeover of Vancouver-based Teck worth about US$20-billion. In a highly unusual move, Anglo said it would relocate its head office to Vancouver once the deal closed.
Mr. Carney also made it clear in his conversations with Anglo American that the requirement to move its headquarters to Canada would be a bar that any company planning on buying Teck would have to clear, the sources said.
The Globe and Mail is not identifying the sources because they were not authorized to speak publicly.
Ottawa must approve the deal for it to proceed. Given that Mr. Carney won election on a pledge to protect the domestic economy in the face of a U.S. trade war, allowing the sale of a Canadian mining giant to a foreign multinational could be seen as a failure.
Teck declined to comment on Mr. Carney’s conditions for the Anglo deal, but Doug Brown, Teck’s vice-president of communications and government affairs, wrote in an e-mail to The Globe that “it is unprecedented for a major multi-national mining company to move its global headquarters to Canada in this fashion.“
With Mr. Carney insisting that any potential suitor for Teck move its headquarters to Canada, the chances of other bidders surfacing appears to be low. Other potential suitors for Teck, including BHP Group Inc., Glencore PLC, Vale SA, and Freeport-McMoRan Inc., all have headquarters outside of Canada.
Both Audrey Champoux, a spokesperson for Mr. Carney, and James Wyatt-Tilby, senior vice-president, corporate affairs with Anglo, declined to comment.
Ottawa in 2024 tightened the rules around proposed acquisitions of Canadian critical minerals companies considerably, making deals much more difficult for foreign acquirers. After approving Glencore PLC’s acquisition of a majority stake in Teck’s coal business, then-industry minister François-Philippe Champagne said Canada would approve foreign acquisitions of big Canadian critical minerals companies only “in the most exceptional of circumstances.”
In justifying the extremely high bar, Mr. Champagne said it was because of the strategic importance of critical minerals, which are used in a wide range of technologies, including electric vehicles, fighter jets and consumer electronics.
Analysis: Teck Resources justified its takeover to shareholders – but not to Canadians
There is precedent for Canadian prime ministers getting heavily involved in sensitive corporate takeovers in the resource sector.
Stephen Harper took an active role when Australia’s BHP attempted to buy fertilizer giant Potash Corp. Mr. Harper’s government ultimately rejected that deal in 2010.
Mr. Carney’s participation early in the negotiations between Anglo American and Ottawa isn’t a complete surprise given his experience in dealmaking and economics. Before entering politics, he spent more than a decade as an investment banker at Goldman Sachs and served as governor for both the Bank of Canada and the Bank of England during economic crises.
The takeover of Teck by Anglo must be approved by Industry Minister Mélanie Joly before it can close. She will scrutinize the transaction for national-security concerns, and it must make economic sense for Canada under the net-benefit test. The timeline to conduct such reviews typically takes about eight months.
While Anglo has promised to move its headquarters to Canada, it will remain a British company domiciled in London. In addition, the company’s primary stock listing will be in London.
Tom Caldwell, past governor of the Toronto Stock Exchange and chairman of both Caldwell Securities Ltd. and Urban Corp., in an interview said the Teck transaction is another blow to the Canadian mining industry. It’s the latest in a long line of transactions in which Canada has been the seller, rather than the buyer, and the country has been hollowed out as a result, he said.
Over the past few decades, many of Canada’s biggest mining champions have been acquired by foreign buyers, including Alcan Inc., Falconbridge Ltd., Noranda Inc. and Inco Ltd. Teck is one of the last remaining sizable Canadian critical minerals companies.
“It’s either a comment on our financial system, that we are unable to raise money here, or the calibre of managements that don’t think large enough on a world scale,” Mr. Caldwell said. “I mean, you have companies out of South America, Australia, and South Africa dominating the Canadian mining scene. It’s a joke.”
“I just shake my head and think of the promise we’ve had as a country, the great educational system − Canadian mining engineers are among the best in the world. Yet we’re not a powerhouse in the world mining scene,” he added.
Apart from promising to move its HQ to Canada, Anglo has committed to moving many of its personnel to this country. Its chief executive officer, deputy CEO, chief financial officer and “a significant majority” of the executive management team will be based in and live in Canada. In addition, “a substantial proportion” of the board of directors will be Canadian. The company will be renamed “Anglo Teck.”
Teck’s legacy goes back to 1913, when Hughes Gold Mines Ltd. started a gold mine in Teck Township on the shores of Kirkland Lake, Ont. The Keevil family has been involved in the company since the 1950s. Norman B. Keevil, now in his late 80s, is one of Teck’s controlling shareholders.
Mr. Keevil is in favour of the Anglo deal, telling The Globe on the day the transaction was announced that Anglo’s bigger scale will help guarantee Teck’s future.