Glencore plc (LSE:GLEN) entered into a binding agreement to acquire 77% stake in Elk Valley Resources Ltd. from Teck Resources Limited (TSX:TECK.B) for $6.93 billion on November 14, 2023. The consideration is on a cash free debt free basis, subject to a normalized level of working capital. Concurrently, Teck has agreed with Nippon Steel Corporation ("NSC") that its current 2.5% interest in Elkview Operations will be rolled up to equity in EVR, and that NSC will acquire additional equity in EVR from Teck, such that on closing NSC will hold a 20% equity interest in EVR at an implied value of $8.5 billion. POSCO has advised Teck that it intends to exchange its current 2.5% interest in Elkview Operations and its 20% interest in the Greenhills joint venture, for a 3% interest in EVR. At closing, Glencore will also acquire from Teck, NSC and POSCO's attributable share of a shareholder loan from Teck to EVR which is repayable out of EVR's cash flows. The amount payable for this portion of the loan is expected to be some $250-$300 million on closing. EVR reported $5.5 billion EBITDA and profit before tax as $4.4 billion for the period end on 2022. EVR will continue to operate in Canada through both a Vancouver head office and regional offices in Calgary, Alberta, and Sparwood, British Columbia, including completing the construction of a new Sparwood office. Glencore intends for the demerged company to continue to oversee the responsible decline of its thermal coal operations in line with Glencore's current targets and ambition to achieve net zero by 2050, with a supportive policy environment, and to adopt the climate transition strategy for the EVR business that will be developed and implemented pursuant to Glencore's ICA commitments. Glencore will submit to the Director of Investments written undertakings to His Majesty the King in right of Canada that are consistent with all of the commitments set out below, each of which shall have a term of three years commencing from closing of the acquisition of EVR. At least a majority of the directors of EVR, and at least a majority of executive and senior management level roles of EVR, will be comprised of Canadians. In the event of a public listing of a company that, directly or indirectly, owns EVR following a demerger, during the term of these undertakings, the company whose shares are listed will have a listing on the Toronto Stock Exchange (TSX) and Canadians will participate on the board of directors of any such listed company. The transaction is subject to mandatory regulatory approvals, being Investment Canada Act ("ICA") and competition approvals. The transaction is expected to close in Q3 2024. Teck intends to use the proceeds to strengthen the balance sheet, return cash to shareholders, and ensure Teck is
well-capitalized to realize value from copper growth portfolio, estimated transaction-related taxes of ~$750 million.

Stikeman Elliott LLP and Adam Givertz, Christopher Cummings, Ian Hazlett, Suhan Shim, Andrew Krause, Aaron Schlaphoff, David Tarr, David Mayo, Robert Holo, Lewis Clayton, John Carlin and Joshua Soven of Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to Teck in the transaction. TD Securities Inc., CIBC World Markets Inc., Barclays Capital Canada Inc. and Ardea Partners LP acted as financial advisors to Teck. BMO Capital Markets, Goldman Sachs & Co. LLC, and Origin Merchant Partners are serving as financial advisors to the Special Committee of Teck Board and Blake, Cassels & Graydon LLP and Sullivan & Cromwell LLP are acting as legal advisors to the Special Committee. The Special Committee received opinions from each of BMO Capital Markets and Origin Merchant Partners to the effect that the consideration to be received by Teck pursuant to the transactions is fair, from a financial point of view, to Teck.