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“The government has also secured a commitment from Teck to reinvest a significant amount of the proceeds of this transaction into its copper growth portfolio, which will position Teck for leadership in the pivotal area of critical minerals,” a July 2024 press release from Champagne’s office said.
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The mechanism that the government uses to put its stamp on such transactions is the ICA, which allows it broad discretion to determine whether a deal will bring a net benefit to the Canadian economy.
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On Tuesday, Industry Minister Mélanie Joly said she would closely review Teck’s current proposal to merge with Anglo American to see if it meets the ICA requirements.
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That is partially why the company described the proposed new entity as “a leading global critical minerals champion headquartered in Canada.”
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Of course, no one can say exactly whether a multinational company is truly Canadian.
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Teck has called its agreement with Anglo American “a merger of equals,” but the latter’s shareholders will control roughly 62.4 per cent of the new $70-billion entity while Teck shareholders hold 37.6 per cent.
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Anglo Teck would keep its primary stock listing in London, which will lead some investors to classify it as a United Kingdom company. Some of the benefits from its business — for example, banking — might naturally flow to U.K.-based firms.
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Duncan Wanblad, chief executive of Anglo American, who will keep that title in the new entity, is a native of South Africa, where his company was founded more than a century ago and still employs tens of thousands of people.
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That came in handy last year when South Africa’s Public Investment Corp. refused to back BHP Group Ltd.’s unsolicited takeover bid for Anglo American, which helped to quash the deal.
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Wanblad currently lives in the U.K., but said he is looking forward to moving to Vancouver, somewhere he has never lived, as part of the deal.
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Meanwhile, Teck chief executive Jonathan Price — who will become deputy CEO at Anglo Teck — is a native of Wales, though the company said his principal residence is in Vancouver.
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To some, governments that impose requirements on companies to maintain employee levels in offices and other conditions before approving deals may be creating illusions rather than realities.
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Kate McNeece, a foreign investment lawyer at Goodmans LLP, said companies enter into contracts with the government when they agree to meet the terms of approval under the ICA.
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Typically the contracts contain clauses about monitoring the commitments and the government could enforce violations in courts, she said, although such actions are extremely rare.
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“If you look at the history, there really haven’t been any enforcement actions,” McNeece said. “That either means people are complying or enforcement is lax.”
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That may be why some people within the mining sector are skeptical that Anglo Teck will keep its ties to Canada if they are no longer valuable.
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Pierre Lassonde, chair emeritus of Franco Nevada Corp., a gold-focused royalty company, said he thinks any commitments that the government wrings from Teck or Anglo to maintain operations in Canada will fall by the wayside or be forgotten.
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“Five years down the road, nobody will remember the promises,” he said. “I guarantee you the head office will be back in London.”
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