(Zurich) Swiss commodities giant Glencore has received the green light from Canada to acquire Teck Resources’ coal business, allowing it to complete the transaction.
The green light from Canada was “the final regulatory approval” needed to complete the transaction, which is expected to be finalized on “July 11,” the Swiss commodities trading giant said in a statement.
Glencore engaged in a fierce battle last year to try to take over the steelmaking coal activities of Canadian group Teck Resources through a complex and controversial offer that caused a stir among shareholders and politicians in Canada.
After two refusals and eight months of battle, Teck Resources finally agreed to sell him a 77% stake in its steelmaking coal subsidiary, called Elk Valley Resources (EVR), for $6.93 billion in cash.
Japanese steelmaker Nippon Steel Corporation is to take a 20 percent stake, while South Korean steelmaker Posco is to obtain a 3 percent stake in EVR, under the terms of the deal.
In the statement, Glencore said that a consultation process will be launched with its shareholders regarding a split of the coal activities. With this acquisition, Glencore had said it wanted to combine its own coal activities with those of EVR and then possibly split them from the rest of the group.
Coal is an activity that has drawn strong criticism from Glencore, including from shareholders. They argue that some investors cannot hold shares in the group, which is active in copper, nickel and cobalt, because of its presence in coal.
Unlike several competitors that are withdrawing from coal, Glencore continues to defend this raw material by saying it wants to manage its mines responsibly until they are exhausted.
Since 2020, the Norwegian sovereign wealth fund, the world’s largest investor, has placed Glencore on its exclusion list because of its presence in coal.