It's about copper ! Glencore CEO’s first big move: Chasing mining's toughest prize
Glencore’s bid for Teck marks the public return to mega deals by the world’s biggest miners, as rising demand for metals like copper and nickel to facilitate the green-energy transition helps revive the industry’s appetite for acquisitions.
The largest producers have spent a decade on the sidelines after a series of disastrous deals during the 2000s commodities boom. During that period, nearly every big name in mining either disappeared or became one of the handful of behemoths that denominate the sector today.
The exceptions mostly had one thing in common: a single family or large shareholder that didn’t want to sell.
For Chilean copper miner Antofagasta it was the Luksic family, for Teck it was the Keevils.
Teck has also sought to frame the battle as a defense of Canadian mining, after many of its rivals were swallowed up during the last takeover frenzy.
For Glencore to be successful, there are some serious obstacles to overcome. Glencore cannot buy Teck without the support of Keevil, who has so far been blunt in his refusal.
The company would also have to muster wider shareholder support at a time when mining investors have been demanding weighty premiums —
BHP and Rio Tinto both recently bought copper miners at around a 50% premium. China’s sovereign wealth fund is the biggest holder of Teck’s Class B shares, with about 10%.
Still, while this is Nagle’s first big deal as CEO, he has some experienced heads at his side. As well as Glasenberg, Nagle has veteran dealmaker Michael Klein. Bloomberg reported on Friday Glencore has been working with Klein as well as Citigroup on the Teck bid, continuing a longstanding relationship after Klein previously acted as a go-between in the negotiations to take over Glencore’s sister company Xstrata a decade ago.
Since Teck went public in rejecting Glencore’s offer, Nagle has traveled relentlessly to meet with shareholders and muster support, including a dash to Toronto. For Nagle, who spent much of his year as a trader, the salesman lifestyle comes naturally.
In an interview with Bloomberg last month, Nagle said it goes without saying that his employees travel on a weekend to optimize their time during the week.
“It’s done naturally,” he said. “Nobody gets up and says should I travel on Sunday or Monday?”