Glencore buys stakes in Brazil assets as Teck saga continues

(Alliance News) - Glencore PLC on Thursday said it has bought stakes in assets in Brazil for ...

Alliance News 27 April, 2023 | 10:25AM
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(Alliance News) - Glencore PLC on Thursday said it has bought stakes in assets in Brazil for USD775 million in total, as it affirmed its bid to acquire Teck Resources Ltd still stands.

Teck on Wednesday pulled a shareholder vote on its own separation plans, after receiving investor feedback. Glencore said its own offer to buy Teck still stands, and added it is willing to engage with the New York-listed firm's management.

The miner and commodity trader also said it will buy a 30% stake in Brazilian alumina refinery Alunorte SA and 45% of bauxite mine Mineracao Rio do Norte SA. It will acquire the stakes from aluminium company Norsk Hydro ASA.

Glencore will acquire the non-controlling stakes for a combined equity value of around USD775 million.

Glencore said it will become party to the Alunorte joint venture alongside Norsk Hydro and other minority stakeholders, and will join South32 Ltd, Rio Tinto PLC and Companhia Brasileira de Aluminio on the MRN venture on completion.

Robin Scheiner, Glencore's head of alumina and aluminium, said: "The acquisition of the equity stakes in Alunorte and MRN provide Glencore with exposure to lower-quartile carbon alumina and bauxite, enhancing our capability to supply such critical material for the ongoing energy transition to our customers. Both Alunorte and MRN produce high quality products, which should support particularly our marketing activities across the Atlantic basin."

On Teck, Glencore said that it is willing to make an offer directly to the company's shareholders, if "there continues to be no engagement from the Teck board". Teck has previously denied Glencore's claim that it has failed to engage, however.

Teck has so far resisted Glencore's takeover attempts and backed its own restructuring plan. Shareholders would have had the chance to vote on its plan on Wednesday, though Teck withdrew the proposal.

"We received very strong support from shareholders for the goal of separation, which is to unlock value through creation of a premier, pure-play base metals company and a world-class steelmaking coal company. We have also listened and heard the feedback that some shareholders would prefer a more direct approach to separation," Teck Chief Executive Jonathan Price said on Wednesday.

"Our plan going forward is to pursue a simpler and more direct separation, which is the best path to unlock the full value of Teck for our shareholders."

Earlier in April, Glencore revised its offer for Teck, adding a cash element of USD8.2 billion plus a 24% stake in MetalsCo to the Vancouver-based miner's shareholders. MetalsCo would be a transition metals focused business. It would differ from CoalCo, which would be a standalone coal unit. Teck shareholders could opt for CoalCo shares instead of the cash, and would own up to 24% of it if all did.

Glencore had originally offered 7.78 of its own shares for each Teck Class B subordinate voting share, and 12.73 shares for each Teck Class A common share.

Glencore shares were down 0.6% at 478.34 pence each in London on Thursday morning. Teck shares rose 4.1% to USD44.95 each in New York overnight. It has a market capitalisation of around USD23.33 billion.

By Sabrina Penty; Alliance News reporter

Comments and questions to newsroom@alliancenews.com

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Glencore PLC 483.95 GBX 0.10
Rio Tinto PLC Registered Shares 5,655.00 GBX -0.44
South32 Ltd 201.80 GBX 1.00
South32 Ltd 3.85 AUD 0.00

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