Ahead of vote, Teck-Anglo merger faces ongoing investor concerns

The proposed $20 billion merger between Teck Resources and Anglo American has encountered hurdles, with economists and investors raising concerns about its potential impact on the Canadian economy and financial markets.

The special shareholder's meeting for the merger deal will take place both in person in Vancouver and online on December 9, 2025, at 11:00 a.m. Pacific Time. Shareholders of record at the close of business on October 20, 2025, may vote.

Teck Resources faced some strong opposition from major shareholders, who voiced concerns about the absence of a takeover premium and the potential removal of Teck from Canadian stock indices. Orest Wowkodaw, an analyst at Bank of Nova Scotia, has suggested that securing approval for the deal may prove challenging, citing widespread investor discontent and the potential loss of Teck's status as a Canadian mining icon.

The merger would create a new entity called Anglo Teck, headquartered in Vancouver but incorporated in London with its primary listing on the London Stock Exchange. This structure has raised questions about sovereignty and job security in Canada. Economists argue that the merger could reduce competition in the Canadian mining sector and make the new entity less attractive to Canadian investors.

Wowkodaw expressed doubt about the deal's success under its current terms, citing widespread investor dissatisfaction. Jean-Michel Gauthier, another analyst at Scotiabank, highlighted the implications of the merger on index inclusion and the potential for forced selling by index investors.

The potential removal of Teck from key Canadian stock indices is a major concern to some financial analysts, as it would render the company "uninvestable" for numerous Canadian funds and investors focused on domestic markets. Financial experts predict that if the merger proceeds, it could trigger substantial share sales by index investors who would need to adjust their holdings.

Adding to the complexity, a prominent City group recently advised investors to reject proposals that would ensure substantial share rewards for Anglo American executives upon merger completion. At the time, the Investment Association's IVIS voting advisory service issued its strongest warning against the resolution. Institutional Shareholder Services (ISS), while supporting the merger itself, recommended opposing the bonus scheme alterations, stating that tying variable incentives to transaction completion was not considered good practice.

This development occurred shortly after rival miner BHP made a second approach to Anglo about a potential acquisition, before quickly withdrawing.

As the proposed merger moves forward, Teck shareholders find themselves weighing the potential benefits of the deal against the loss of a prominent Canadian mining company and its important place in domestic stock indices. The merger also faces regulatory hurdles and requires shareholder approval, which could lead to delays or even derail the process.

An unnamed Anglo American representative defended the proposed changes, stating they would foster greater alignment with shareholders' interests. However, the lack of a takeover premium and concerns about value dilution, particularly regarding Teck's copper assets, continue to fuel some ongoing investor resistance.

Analysts from Jefferies Group, while not directly opposing the deal, have acknowledged the dissatisfaction of some Class B shareholders with the merger terms. Unnamed institutional investors are also described as resistant to the deal, particularly due to the lack of premium and index-related concerns.

As the situation unfolds, analysts speculated the deal terms may need to be improved to win shareholder support, while also noting that the chances of approval could increase if short-term investors like hedge funds buy shares from long-term shareholders who decide to sell.

In a significant development, Canada's federal government has reportedly approved the proposed merger between Anglo American and Teck Resources on national security grounds. The Globe and Mail broke this news, citing an anonymous source close to the matter.

The initial 45-day review period set by Ottawa has passed without extension, effectively granting default clearance to the transaction from a national security perspective. This silent approval marks a crucial step forward for the high-profile mining merger.

When approached for comment, a spokesperson for Canadian Industry Minister Mélanie Joly did not immediately respond. This comes just days after Joly had publicly stated Ottawa would evaluate the deal under the Investment Canada Act, with a final decision expected in the coming months.

The clearance on national security grounds removes a major hurdle for the Anglo-Teck merger. However, the deal still faces other regulatory challenges and requires shareholder approval. Industry watchers now turn their attention to these remaining obstacles as the mining giants move closer to their proposed combination.