Glencore to lead $9bn deal to buy Teck’s coal division

Teck Resources is set to sell its coal business to commodities trader and miner Glencore, Japan’s Nippon Steel Corp and South Korea’s POSCO Holdings in a nearly $9 billion deal that could be announced as early as Tuesday.

People familiar with the talks said Glencore would take 77% of Teck’s coal business for $6.9 billion, with the steelmakers taking the remainder. Nippon Steel would end up with 20% in exchange for $1.7 billion and its interest in one of Teck’s operations, while POSCO would take 3%, the people said. They could not be identified as the negotiations are private.

Details of the Glencore-led acquisition were earlier reported by the Globe and Mail. Glencore did not comment, while Teck did not immediately reply to requests from Bloomberg. Nippon Steel said it was in talks over Teck’s coal business, but declined to comment on the news story.

A sale agreement would represent a dialing back of hostilities after Teck and Glencore butted heads earlier this year over an unsolicited offer from the Swiss giant to buy the whole of the Canadian miner and then split it into metals- and coal-focused companies. Teck repeatedly rebuffed Glencore’s bid.

The miner and commodities trader then proposed buying Teck’s coal business in June as an alternative to its initial bid.

Teck had been seeking to split out its coal business, but was forced back to the drawing board after canceling a shareholder vote on the planned spinoff in April.

The addition of Teck’s business would further consolidate Glencore’s position as one of the world’s biggest coal miners. The company said in June that if its proposal succeeded, it would look to spin off its own coal operations and combine them with Teck’s assets.

Teck, whose valuation had been weighed down by coal, will be left a smaller miner, focused on copper and zinc — two minerals crucial for the energy transition.

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