Top Tory slams Anglo American’s move to relocate HQ to Canada
Anglo American will merge with Canada’s Teck Resources in a $50bn (£36bn) deal, shifting its headquarters to Canada and reducing its London presence in a move criticised by shadow business secretary Andrew Griffith. The Tory MP said it represents a blow to UK business and confidence in London.
The new entity, to be called Anglo Teck, is expected to have roughly 70 per cent exposure to copper, as well as premium iron ore and zinc. Under the terms of the deal, Anglo will own 62.4 per cent of the combined group, with Teck shareholders owning the rest.
Anglo American’s share price rocketed up 7.75 per cent in early morning trading to £24.55, in response to the news.
HQ relocates to Canada
The company will be headquartered in Vancouver, but will retain its primary London listing with secondary listings in Johannesburg, Toronto and New York.
However, as a result, Anglo American’s London office, which employs up to 700 people, will be significantly downsized.
The merged company will be led by Anglo American chief executive Duncan Wanblad, while Teck chief executive Johnathan Price will move to the role of deputy CEO. However, the CEO, deputy CEO, CFO, and a “significant majority” of the executive management team will also be based in and reside in Canada.
Andrew Griffith told CityAM, “If we want the UK to be the best place in the world to do business, Labour must wake up fast.”
He said: This is a clear signal that companies and investors are losing confidence in the UK and voting with their feet.”
“Taxing and regulating businesses into submission will not bring growth; it drives them away. What businesses need instead is a government that champions wealth creation and investment, not one that undermines our competitiveness.”
The fact that a historic British mining giant is moving its headquarters to Canada is yet another signal of decline under Labour,” the shadow business secretary added.
The deal, revealed to its shareholders on Tuesday, follows both companies rejecting takeover approaches from larger rivals, including BHP’s failed £39bn pursuit of Anglo in 2024.
Wanblad said: “Together, we are propelling Anglo Teck to the forefront of our industry in terms of value accretive growth in responsibly produced critical minerals.”
Price added: “This transaction will create significant economic opportunity in Canada, while positioning Anglo Teck to deliver sustainable, long-term value for shareholders.”
Shareholder decisions and dividends
The companies said the shareholder vote for the deal would take place in the coming months, and if approved, antitrust approval could take an additional 12 to 18 months.
Anglo will issue 1.33 shares to existing Teck investors for each share they hold in the company.
The London company is also set to issue a special $4.5bn dividend to its own shareholders ahead of the merger.
The merger is expected to generate annual cost savings and efficiency gains of $800m by the fourth year after completion.
Commenting on the deal, AJ Bell investment director Russ Mould said: ““It now remains to be seen whether it can complete the restructuring of its own business and then whether Anglo Teck delivers on its operational and financial targets, but at least the lowly valuation means there could be upside in the newly-formed company’s share price if it does so, all other things being equal and providing commodity prices do not nose dive in the meantime.”