One of Justin Trudeau’s senior cabinet ministers said the Canadian government is monitoring Glencore Plc’s attempted takeover of Teck Resources Ltd., pointing out that the country benefits from having the headquarters of major companies.
“We are following it very closely,” Natural Resources Minister Jonathan Wilkinson said Monday in a phone interview. But he added that his cabinet colleagues won’t pre-judge the “commercial conversations” that are taking place.
Wilkinson said Teck is an important player in Canada’s mining sector not just because of critical minerals projects, but also as a contributor to the economy of his home province of British Columbia, including its coal business.
Teck is racing to secure investor support for its plan to separate its coal and metals assets — on which shareholders are scheduled to vote next week — while fending off an unsolicited US$23 billion takeover offer from Swiss commodities giant Glencore for the whole company.
Wilkinson said it’s a “positive thing for Canada” to have major companies headquartered locally.
“We are a country that would love to have more corporate offices in this country that actually drive research and development spending,” he said. “And so obviously we are watching this with great interest and certainly having conversations.”
But the minister stressed that he won’t jump ahead of talks between the commercial players, or any potential deal review that would be overseen by his cabinet colleague, Industry Minister François-Philippe Champagne.
Teck shares rose to a record close of C$65.15 in Toronto on Monday after controlling shareholder Norman Keevil said the company is willing to consider deals after it’s finished spinning off the coal business.
Canada’s investment law gives the government some latitude to block foreign takeovers of large companies, though the power has not been used frequently. After allowing a string of mega-takeovers in the mining and metals sector in the early 2000s, the government in 2010 blocked BHP Group’s proposed takeover of Potash Corp. of Saskatchewan. Last year, Trudeau’s government ordered Chinese firms to divest of three junior lithium miners and promised tougher rules for investment in the critical minerals sector.
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