Glencore (GLEN.L) offered to buy Teck Resources’ (TECKb.TO) steelmaking coal business on Monday after the Canadian miner twice rejected its $22.5 billion merger deal.
On June 6, Teck Resources said it had received multiple coal business bids as it reworks a plan to split it from its copper and zinc subsidiary, which failed to win shareholder backing in late April. Teck announced its coal bid with Glencore on Monday.
Glencore, which mines and trades thermal coal, a fossil fuel used to generate power, and lesser amounts of coking coal to make steel, said it would demerge both companies’ coal businesses.
“If Teck is unwilling to consider a sale of Teck Metals at this juncture, an attractive’middle ground’ could be the sale of the coking coal assets to Glencore,” Deutsche Bank analysts wrote.
“It would help Teck exit coal and let Glencore split into CoalCo and MetalsCo.”
In May, Glencore CEO Gary Nagle stated the company’s “distant second” was buying Teck’s coal division.
Glencore is interested in Teck’s steelmaking coal mines as coal-fired power generation is phased out worldwide. Pierre Lassonde and Nippon Steel Corporation (5401.T) are interested.
Glencore first offered up to $8.2 billion in cash to Teck shareholders who may not want thermal coal exposure.
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