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Teck Resources (NYSE:TECK) CEO Jonathan Price said Tuesday he anticipates no problems obtaining the necessary regulatory approvals for Glencore’s (OTCPK:GLCNF) (OTCPK:GLNCY) proposed $6.9B purchase of its coal business.
New industry protections contained within the deal should ease government concerns and ultimately pave the way for the deal to pass regulatory inspection, Price told Bloomberg.
“We’ll see Glencore committing to maintaining employment levels in Canada and in the coal business, committing to a Vancouver-based headquarters for the coal business, committing to additional investment in that business in the years ahead, particularly in the areas of research and development and community investments,” Price said.
“This is a much easier deal to sell to the Canadian government than the previous one was, partly because… it’s not for the whole company, it’s just for the coal assets, so you’ll continue to have a very important Canadian critical metals company in existence in the remainder of Teck,” John Manley, senior advisor at Bennett Jones who once served as Canada’s finance minister, told Bloomberg.
Canada Finance Minister Chrystia Freeland said the government will review the deal, with an eye toward implications for employment, the environment and indigenous rights.
The deal will allow Teck (TECK) to strengthen its business and focus efforts on other commodities, such as copper, IA Private Wealth’s Allan Small told Bloomberg.
“They’re going to refocus, fix their balance sheet, improve their balance sheet, pay down some debt and… hopefully give some money back to shareholders,” Small said.
