Mining giant Glencore is set to increase its offer for Canadian rival Teck Resources in a fight that could define the future of the industry.
The FTSE 100 group has already this year made an £18.5billion bid, which was snubbed by Teck, which called it a ‘non-starter.’
But Glencore may ratchet up the pressure to force the Canadian firm to negotiate.
Any takeover would come under heavy scrutiny from Canadian authorities
Teck’s leadership originally planned to split the business into two, focusing on coal and metal mining respectively.
They U-turned in April when that plan failed to win support from investors, strengthening Glencore’s hand.
A merger would be one of the biggest deals this year and would define Glencore’s legacy as it aims to create one of the world’s biggest miners – and ditch its unpopular but highly profitable coal business.
But the Swiss firm’s aggressive pursuit of Teck has sparked a tense stand-off between the two – as well as with the Canadian government and the mining industry.
Any takeover would come under heavy scrutiny from Canadian authorities, which can block deals and recently clamped down hard on foreign investment in the mineral industry. It is thought officials will support Teck’s continued independence.
Glencore also faces Norman Keevil, 84, a Canadian magnate whose shares in Teck give him an effective veto.
His vociferous rejection of the bid irked some investors and he has since softened his tone, saying he ‘can’t go swimming against the tide’ if most of the other investors support Glencore.
Given the possibility of a sweeter bid, Teck is in a race against time to come up with a new plan for its business before its rival wins over investors, and has been trying to sell its coal assets.
Glencore declined to comment.
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