Anglo American and Teck Resources have agreed to merge in an all-share transaction to create "Anglo Teck," a Canada-based miner set to become one of the world's top five copper producers. The deal marks the largest mining M&A transaction in more than a decade and comes amid a global scramble for rare earth minerals, driven by data center buildouts, power grid upgrades, electric vehicles, and other electrification trends. 

Under the proposed mega-merger, Anglo shareholders will hold 62.4% of Anglo Teck, while Teck investors will own 37.6%. The combined company is expected to produce about 1.2 million metric tons of copper annually, driven by Anglo's 770,000-ton output and Teck's 545,000 tons.

The deal comes as copper demand rises on the back of global electrification trends, including data center buildouts, the proliferation of EVs, and widespread power grid upgrades to handle the explosion in demand. 

At a press conference, Anglo CEO Duncan Wanblad told reporters: "We will have a stronger, more resilient financial platform with scale advantages, including greater flexibility to reallocate capital dynamically to the highest returning opportunities."

Additional color on the Anglo Teck mega deal:

Berenberg analysts Richard Hatch and William Dalby told clients earlier, "The combination will result in a compelling, large-scale copper business, we think, with zinc and iron ore exposure, too." 

Anglo American's London shares jumped the most in 17 months, up nearly 10% by late morning in Europe. U.S.-listed Teck shares were up 14% in premarket trading. 

Berenberg analysts noted that Glencore could emerge as a rival bidder but said cultural differences would likely pose a major hurdle. They added that BHP may also show interest, given the scale Teck could bring to its copper business.

"A bidding war could ensue," the Jefferies analysts told clients.