- Prime minister promises ‘consistent’ application of M&A rules
- Vancouver miner has been trying to fend off Glencore approach
According to Bloomberg article published on April 29, 2023, Teck Resources Ltd. is a “great company” that’s important to Canada’s economy, and any takeover bid for the miner will have to get through a “rigorous process” to win government approval, Canadian Prime Minister Justin Trudeau said.
The company’s tense fight with Glencore Plc is “certainly something that we’re looking very, very carefully at because it is important to have these great companies in Canada,” Trudeau said Friday in an interview on Bloomberg Television. He promised that, if the government is asked to approve a deal, it will be consistent in applying Canada’s takeover rules “so investors can know what they’re getting into.”
Teck has been trying to fend off an approach from Glencore Plc, but the Vancouver-based company suffered a setback this week when it couldn’t get enough shareholder support for its own plan to separate its metals and coal divisions.
“What’s more important to me is the company behaving the right way towards the environment, whether it’s a local company or a foreign multinational,” Trudeau said. “We have high and stringent expectations, not just on environmental issues but on partnership with indigenous peoples.”
The takeover interest by Glencore has helped boost Teck shares — they’re up nearly 25% this year in Toronto. But as Canada’s largest diversified base-metals producer, its fate has recently become a broader political issue.
British Columbia Premier David Eby has weighed in against it. The federal government stopped short of that: In a letter to Vancouver’s board of trade this week, Deputy Prime Minister Chrystia Freeland said Canada needs companies like Teck as part of its strategy to move toward cleaner forms of energy.
“The mining of critical minerals is key to the future — and only companies that make serious commitments to ESG and strong partnerships with Indigenous peoples will succeed,” Freeland wrote. “Rest assured that the federal government is following this very closely.”
Any acquisition of Teck would have to undergo a government review, with the final decision likely to fall on the desk of Industry Minister Francois-Philippe Champagne, who signed Freeland’s letter with Natural Resources Minister Jonathan Wilkinson.
Large-scale mining takeovers have been a sensitive topic in Canada ever since a wave of deals more than 15 years ago took out some of the sector’s biggest players, including nickel miner Inco Ltd. and aluminum producer Alcan Inc.
In 2010, when BHP Group proposed a takeover of Potash Corp. of Saskatchewan, the government of then-Prime Minister Stephen Harper blocked it on the grounds that it would not be of “net benefit” to the country.
Canadian mining executive Pierre Lassonde, a founder of Franco-Nevada Mining, said he’s convinced the Trudeau government could intervene to block a Teck deal, if necessary. “It would be a tragedy for Canada if this transaction was approved by the federal government,” Lassonde said in an interview on Radio-Canada on Friday.
