Glencore To Buy 77% Stake In Teck Resources' Steelmaking Coal Business For $6.93 Bln

(RTTNews) - Glencore Plc (GLCNF.PK, GLNCY.PK, GLEN.L) announced Tuesday its binding agreement to acquire a 77 percent effective interest in Teck Resources Limited's (TECK) steelmaking coal business, Elk Valley Resources or EVR, for $6.93 billion in cash.

Concurrently, Teck has agreed with Nippon Steel Corp. that its current 2.5 percent interest in Elkview Operations will be rolled up to equity in EVR. Nippon Steel will acquire additional equity in EVR from Teck, such that on closing, Nippon Steel will hold a 20 percent equity interest in EVR.

Further, POSCO has advised Teck that it intends to exchange its current 2.5 percent interest in Elkview Operations and its 20 percent interest in the Greenhills joint venture, for a 3 percent interest in EVR.

At closing, Glencore will also acquire from Teck, NSC and POSCO's attributable share of a shareholder loan from Teck to EVR which is repayable out of EVR's cash flows. The amount payable for this portion of the loan would be around $250 million to $300 million on closing.

The company said the transaction is expected to close in the third quarter of fiscal 2024, subject to mandatory regulatory approvals, being Investment Canada Act ("ICA") and competition approvals.

On the deal closure, assuming the POSCO roll-up proceeds, EVR will own 100 percent interests in the entities holding the Elkview, Fording River, Greenhills and Line Creek mines in Southeast British Columbia, and 46 percent of Neptune Terminals in North Vancouver.