Glencore has made a revised offer for the acquisition of Teck Resources, after its initial merger proposal was rejected last week. Courtesy of Teck Resources.

Switzerland-based Glencore has made a second advance to acquire Teck Resources, Canada’s largest diversified mining company, and has added a US$8.2 billion cash component to its previous offer. Teck confirmed today in a press release that it has received the “revised, unsolicited, non-binding proposal” from Glencore.

Glencore made an initial US$23.1 billion merger proposal on April 3, which would have seen Glencore acquire Teck and then create two separate companies, one dedicated to metals (MetalsCo) and one focused on thermal and metallurgical coal and carbon steel materials (CoalCo).

Teck rejected this bid, citing concerns that the deal would expose Teck shareholders to thermal coal and oil trading, which it said conflicts with the global decarbonization agenda. It also took issue with the offer as “opportunistically timed,” as it came just days after Teck announced first copper at its Quebrada Blanca Phase 2 (QB2) megaproject in Chile, and said that the proposed deal would have transferred significant value to Glencore at the expense of Teck shareholders.

Teck has been moving away from fossil fuels as part of its objective to be carbon neutral across all operations and activities by 2050. In October 2022, Teck announced a plan to sell its 21 per cent stake in the Fort Hills oil sands project in Alberta, effectively exiting the oil sands business; it completed the sale in early February.

Later that month, the company revealed its plan to separate its steelmaking coal business from its base metals operations. A separate publicly traded company called Elk Valley Resources would be created for its coal operations, while Teck Resources would be renamed Teck Metals Corp. and would focus on base metals, particularly copper.

Teck planned to seek shareholder approval of this planned separation at its annual meeting, which is scheduled for April 26. In a press release yesterday, Teck reaffirmed the reorganization as “the optimal pathway to maximize shareholder value with the greatest certainty” and recommended that its shareholders approve the separation. It added that Glencore’s merger attempt is “not actionable,” meaning that only two options for its shareholders are Teck’s planned separation or maintaining the status quo.

Related: Glencore argued the merger would create two companies with larger and more diversified portfolios, while Teck said it exposed shareholders to jurisdictional risk

In a letter to the Teck board of directors, published today, Glencore CEO Gary Nagle said, “We acknowledge that certain [Teck] investors may prefer a full coal exit and others may not desire thermal coal exposure.”

In its second offer, Glencore introduced a cash consideration alternative in lieu of shares in CoalCo, which it said would “effectively buy Teck shareholders out of their coal exposure.” Teck shareholders would have the option to receive US$8.2 billion in cash as well as 24 per cent of MetalsCo.

Nagle concluded in his letter: “We believe that it is in your shareholders’ interests to engage with Glencore and we see no valid reason not to delay your shareholders meeting in respect of the proposed Teck separation in order to allow for discussions and due consideration of our proposed transaction for the benefit of all of your shareholders.”

Teck said in its own press release that its board will review and evaluate Glencore’s latest bid but noted that it “appears to be largely unchanged,” apart from the cash component, and that “the revised proposal does not provide an increase in the overall value to be received by Teck shareholders or appear to address material risks previously raised by Teck.”