Mining heavyweight Rio Tinto (ASX:RIO) is reportedly considering potential takeover options including US$26.33 billion ($38.88 billion) dual-listed Canadian miner Teck Resources (NYSE:TECK).
Sky News reported last Friday that sources said the major had drawn up detailed proposals for a potential bid for Vancouver-headquartered Teck which included approaching banks about financing a deal.
According to bankers cited by the news service, any takeover offer would need to be well over US$30 billion, and potentially around US$32 billion, to be considered a “credible approach”.
While London-headquartered Rio Tinto is yet to respond to the media speculation, Sky News reported that a source close to the London-listed miner said the company did not have any immediate plans to launch a bid for Teck, but confirmed it was on its list of possible targets.
There is some question though around whether Canada would allow a full takeover of Teck (TSX:TECK.A), given recent restrictions around foreign companies looking to acquire Canada-domiciled critical minerals players.
Earlier in July, Industry Minister Francois-Philippe Champagne approved Glencore’s (LSE:GLEN) multi-billion-dollar takeover of Teck’s steelmaking coal division, adding that Canada would only allow similarly large deals in the future under “the most exceptional circumstances”.
Having now offloaded its coal division, Teck is now predominantly focused on copper, zinc and other metals — such as germanium, indium and cadmium — critical to the clean energy transition.
Both copper and zinc are classified as critical minerals by the Canadian Government.
One mining banker told Sky News the prospects of a successful overseas offer for Teck were “negligible”.
Write to Angela East at Mining.com.au
Images: Teck Resources
