Anglo-Teck wait shows mining M&A’s rising toll

Yet one important signature is still missing. China is the last major jurisdiction yet to approve the transaction, and financial news service Mergermarket reported last week that Beijing had suspended its review clock. The People's Republic typically gives the State Administration for Market Regulation (SAMR) up to 180 days to vet a merger, but the regulator can stop the countdown while seeking information or considering remedies. The deal is not an obvious target for competition regulators. The combined Anglo-Teck would have 5% of global copper output, based on 2024 figures. Investors seem confident the merger will go ahead. Teck trades just 1.3% below the value implied by Anglo's proposed share swap, after adjusting for the South African group's roughly $4.5 billion special dividend, Breakingviews calculates. Yet Beijing has a track record of extracting concessions. In 2013, Chinese regulators required Glencore GLEN.L to sell its Las Bambas copper project in Peru as a condition for approving the miner's takeover of rival Xstrata. A Chinese-led consortium later bought the asset for $5.85 billion. Teck has few obvious assets to sacrifice, while its best copper mines are precisely what makes the merger with Anglo attractive. Still, the pair could offer other goodies, like supply guarantees or purchase agreements. China may also be seeking preferential treatment of its companies overseas, at a time when countries such as Canada are making it harder for Chinese investors to buy strategic mineral assets and have even ordered some existing holdings to be sold. Chinese authorities are hardly alone in scrutinising commodity supply chains. European Union regulators are preparing to warn China-controlled MMG 1208.HK over its purchase of Anglo’s Brazilian nickel business, Reuters reported on Tuesday citing sources, partly because of concerns that ferronickel supply could be diverted from Europe. That is a much smaller transaction, but it illustrates the complex geometry of mining deals: selling an asset or making a concession to satisfy one government can raise strategic or competition concerns with another. As prized standalone mines become harder to buy, miners have turned to acquiring rival companies, just as governments are attaching more importance to national security and supply resilience. That may not stop mining megadeals like Anglo-Teck, but it is likely to slow them down - and ultimately make them more expensive. Copper has never been more valuable. That makes owning more of it both attractive and politically awkward. It may also help explain why Anglo American AAL.L and Teck Resources TECKb.TO are still waiting for Chinese approval for their $54 billion merger a year after announcing it. The cost of mining megadeals is going up. Copper hit a record on Tuesday, rising above $14,700 a tonne, as tight supply, strong demand from power grids and electric vehicles, and expectations of U.S. tariffs on refined imports pushed prices higher. The rally is an endorsement of the Anglo-Teck deal: combining the pair would create a miner with some of the industry’s most coveted growth projects focused on the red metal.

Anglo-Teck wait shows mining M&A’s rising toll

China’s approval remains the key hurdle

Mining deals face more scrutiny and higher costs

Copper rally underscores the appeal of the merger

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