The Government of Canada has given the green light to Glencore for its $6.93bn (SFr6.23bn) acquisition of a 77% stake in Teck Resources’ steelmaking coal unit, Elk Valley Resources (EVR).

This marks the final regulatory hurdle cleared for the deal, which is due for completion on 11 July 2024.

Glencore has committed to maintaining the Canadian headquarters of EVR and preserving significant employment levels.

The company has also pledged that Canadians will constitute a majority of EVR’s directors and at least two-thirds of its executive and senior management. Additionally, Glencore has agreed to continue the existing employee health and other benefits.

The acquisition follows a contentious period in 2023, when Teck Resources rebuffed Glencore’s unsolicited buyout bid of around $23bn, which aimed to establish two new entities focused on metals and coal.

Soon after, Teck shelved its prior plans to spin off its coal division.

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Teck Resources plans to utilise the proceeds from this transaction to repurchase up to C$2.75bn of its Class B subordinate voting shares, lower its debt by as much as $2bn and invest in copper growth opportunities.

Teck president and CEO Jonathan Price commented: “Completion of this transaction will provide substantial funding for our projects, giving Teck a pathway to increase copper production by a further 30% as early as 2028.

“This transaction will enable us to reduce debt and retain significant cash to fund our near-term metals growth and maintain a resilient balance sheet, while also providing a significant return of cash to our shareholders.”

Barclays Capital Canada, Ardea Partners, TD Securities and CIBC World Markets acted as financial advisors to Teck for the deal.

Legal advice was provided by Stikeman Elliott and Paul, Weiss, Rifkind, Wharton & Garrison, with Felesky Flynn serving as legal tax advisor.