Teck Announces Full Sale Of Steelmaking Coal Business For An Implied Enterprise Value Of $9B
Portfolio Pulse from Benzinga Newsdesk
Teck Resources Limited (NYSE:TECK) has agreed to sell its steelmaking coal business, Elk Valley Resources, to Glencore plc and Nippon Steel Corporation for an implied enterprise value of $9 billion. Glencore will acquire a 77% stake for $6.9 billion, while Nippon Steel will buy a 20% interest. Proceeds will be used to strengthen Teck's balance sheet and return cash to shareholders. The deal is expected to close in Q3 2024 for Glencore and Q1 2024 for Nippon Steel, subject to regulatory approvals. Glencore will establish a Canadian head office for the business, maintain jobs, and increase investment in the community.
November 14, 2023 | 1:34 pm
News sentiment analysis
Sort by:
Descending
POSITIVE IMPACT
Glencore plc is acquiring a 77% stake in Teck's steelmaking coal business, which will establish a Canadian head office and is expected to maintain jobs and increase local investments.
Glencore's acquisition of a majority stake in a significant coal business could enhance its market position and operational capacity. The establishment of a Canadian head office and the commitment to maintain employment levels and community investment may be viewed positively by investors, potentially leading to a short-term positive impact on the stock.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Teck Resources Limited is selling its steelmaking coal business for $9 billion, which will strengthen its balance sheet and allow for significant cash return to shareholders. The deal refocuses Teck on copper and other critical minerals.
The sale of a major business unit for a substantial amount is likely to be viewed positively by investors, as it promises to strengthen the company's financial position and indicates a strategic refocus on core growth areas like copper. The anticipation of a significant cash return to shareholders could also drive positive sentiment in the short term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100