Anglo American, Teck Resources Merger Could Create $56 Billion Mining Giant: Analyst

Anglo American’s (OTC:NGLOY) planned merger with Teck Resources (NYSE:TECK) would create a combined company with a pro forma market capitalisation of about $56 billion and targeted annual pre-tax synergies of $2.2 billion, according to J.P. Morgan.

The analysts led by Dominic O’Kane estimated the pre-tax synergies carry a net present value of $7 to 8 billion, equivalent to 12 to 14% of the group’s size.

They said Anglo American’s earnings per share are projected to fall 13% in 2027 and narrow to 5% in 2030 if coal and diamond assets are retained, or to 2% in 2030 if divested.

Also Read: Anglo American, Teck Resources Strike $53 Billion Merger To Form Global Critical Minerals Giant

Corporate synergies of $800 million are expected by 2030, with 80% achieved in 2028. Pre-tax synergies of $1.4 billion from integrating the Collahuasi mine are estimated to add $3.5 to 4.0 billion of NPV for Anglo-Teck.

The deal will be executed through a share swap of 1.3301 Anglo shares for each Teck share. Anglo will distribute a $4.5 billion special dividend to Anglo plc shareholders. After completion, Anglo shareholders will own 62% of the new group, headquartered in Vancouver with listings in London, Toronto, Johannesburg, and New York.

Copper is expected to make up 66% of 2027 EBITDA, rising to 72% if coal and diamonds are sold. Net debt is forecast to peak at $10 billion in 2027, or 0.9 times EBITDA, falling to $6 billion (0.6x) if divestments are completed.

Analysts projected Anglo American’s standalone financials as follows: revenue is seen at $21.8 billion in 2025, $20.7 billion in 2026, and $23.2 billion in 2027. Adjusted EBITDA is forecast at $6.5 billion in 2025, $7.1 billion in 2026, and $7.7 billion in 2027.

Adjusted net income is expected to be $722 million in 2025, rising to $1.3 billion in 2026 and $1.6 billion in 2027. Adjusted EPS is forecast at 61 cents in 2025, $1.10 in 2026, and $1.34 in 2027, while dividends per share are projected at 21 cents, 19 cents, and 54 cents over the same period.

Price Action: TECK shares were trading higher by 0.15% to $39.50 at last check Friday.

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