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 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 Phillip 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.
