Canada approves Glencore takeover of Teck coal unit, with conditions
Corrects spelling of industry minister's name in paragraph 3 to Francois-Philippe, not Francois Phillip
By Divya Rajagopal, Surbhi Misra and Mrinmay Dey
July 4 (Reuters) -The Canadian government has approved Glencore's GLEN.L $6.93 billion acquisition of miner Teck Resources' TECKb.TO steelmaking coal unit with strict conditions to preserve jobs, the country's industry minister said on Thursday.
To secure the approval, Glencore has agreed to maintain Canadian headquarters for Elk Valley Resources (EVR) for at least 10 years, ensure a majority of the directors of EVR are Canadians, and maintain significant employment levels at EVR for no less than five years, the ministry said.
"Today I approved under strict conditions a much narrower transaction whereby Glencore will acquire Teck Resources metallurgical coal business," Industry Minister Francois-Philippe Champagne said in a statement.
He flagged that going forward Canada will set a high bar on net-benefit reviews when assessing mergers and acquisitions of important Canadian companies in the critical minerals space.
"Henceforth, such transactions will only be found of net benefit in the most exceptional of circumstances," Champagne said.
Glencore and Teck did not immediately respond to email queries from Reuters.
In November, a Glencore-led consortium sealed one of the mining sector's biggest deals, agreeing to acquire Teck Resources steelmaking coal unit for $9 billion.
Swiss miner Glencore will get 77% of the business in a $6.9 billion cash deal, while 20% will go to Japan's Nippon Steel 5401.T, which already holds a 2.5% stake.
South Korea's POSCO 005490.KS will swap a stake in two of Teck's coal operations for 3% in the steelmaking coal business Elk Valley Resources.
Reporting by Divya Rajagopal in Toronto, Surbhi Misra in Bengaluru; Editing by Alistair Bell and Sonali Paul
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