Anglo American Agrees to Buy Teck in Deal Reshaping Mining

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1:27Scarlet Fu:Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. There is a mega deal in the mining industry today. The UK's Anglo-American has agreed to buy Canada's tech resources. This is going to create a more than$50 billion company, and it is one of the biggest mining deals we've seen in about 10 years. And here to break it down for us is Richard Burke, Bloomberg Intelligence Senior Analyst, Basic Materials.

2:09You've got a busy day here, Richard. Thanks so much for coming in. We appreciate it. The company is presenting this as a zero premium transaction. Just tell us what that is. Okay. So what they've done is it's a merger of equal. And it's kind of interesting, even though it's labeled a merger as equal, that American Angle shareholders are going to end up owning about two-thirds of the company, roughly, and tech shareholders are going to end up owning a third of the company. But it's going to be headquartered in Canada. The board is going to be 50-50, and the management is going to be 50-50. So even though it's got, you know, no premium merger equals kind of, you know, the the governance issues kind of point to a merger equals.

2:57And that's really probably structured in order to get approval by the investment act, Canada Investment Act. And also the capital family that owns tech has two classes, shareholders, class, class A and class B. Class A is super voting rights. he's own he owns majority of shares so he has to approve this deal in the past he you know Glencore when Glencore tried to buy them about two years ago he kind of vetoed the deal so the deal didn't go through so there's kind of a unique structure to this deal to kind of you know fit it

3:34Scarlet Fu:through final approval makes sense okay so there was also language in the statement of this so-called merger of equals that would allow both firms to consider unsolicited proposals uh and for the deal to end if there's a better offer does that mean they're angling for some counter offer from someone else well i think it would be a hard press i doubt in order to get it through the canadian investment act which can't you know copper is now being considered a critical material critical mineral uh-huh canada has said they don't want to see any of their mining companies go away so would somebody come in who can pay that much be willing order bhp or rio tinto be willing to move their headquarters from where they're at to canada i highly doubt it so but i think you have to put that language in the deal that hey we're open to so it's like boilerplate language more than anything and also prevent that you don't get sued by shareholders that you haven't gone out and looked at for all deals.

4:34Right. Do you think that this deal, though, between Anglo-American and tech is going to be the thing that sort of ignites more M &A in this industry? I think, you know, there used to be an old saying, I used to cover oil and gas industry years ago before I was more focused on metals and mining. There used to be an old saying, it's cheaper to draw on Wall Street than drill up in the field. And that seems to be happening. And if you look at how much it costs to, you know, get a new copper deposit up and running, also how many years we're permitting and all the other things that happens, you can see that maybe you sit down and look at this and say, OK, it may be cheaper to mine on Wall Street than go out and make a mine.

5:23Scarlet Fu:OK, before this deal was announced, we've seen that both companies have tried to simplify their businesses. Tech sold the majority of its coal business to Glencore. Anglo American exited the platinum business and is trying to sell its coal mines and wants to get rid of its De Beers diamond unit. Is that going to continue that effort? And will it be harder or easier to do that as part of this giant company? Well, they're both going to, Anglo is going to continue to try to sell coal business and sell De Beers. They think they're going to get it done before the deal closes deals supposed to close for 18 months they said um those are you know and tech was you know two three years ago there was a big push for green companies coal is viewed as very dirty and things like that so right we're seeing companies try to get out of that business to kind of be shareholders especially over in europe it's a bigger push much than in the u.s so So I still see those actions continuing.

6:26It's being billed as a merger of equals. But I'm wondering if one party here is getting a better deal than the other. Because if you look at Anglo-American, if this happens for them, they're going to get that high quality copper asset, right, which is really coveted in the industry. Would you agree that Anglo-American sort of has a better end of the bargain here? Well, the question is, tech has had problems bringing a new mine on Qubibarada online. And the question is, is somebody, one of the investors I was talking this morning goes, well, yes, if Qubib gets fixed and everything runs, it looks like a great deal for annual.

7:02But are you buying a fixer-upper or not? And tech, honestly, they've been very good operators in the coal business. they've got exit exit the coal business they haven't been as good operators in the copper business so to bring in some expertise antler has a little more expertise in the copper business it may help them you know realize the value there richard you mentioned that canada needs to

7:28Scarlet Fu:approve this deal i believe the regulators in china and the u.s need to as well which country is it going to be hardest to get approval from? Well, I think it all depends. You know, a year ago, I would say, would have said Canada. But given that China probably considers copper a critical mineral now, that may, and given the geopolitics that are going on in the world, It may be, there's going to be everybody taking a kind of a very measured look at this deal before it gets approved. Stay with us. More from Bloomberg Intelligence coming up after this. I don't love the word retirement because I think it has negative baggage.

8:16I like the word financial independence. If you were to be financial independent, like how would you spend your time? And that's exactly what a lot of my clients talk about. And the term they'll use is a work optional lifestyle.

8:25Scarlet Fu:I agree, like the next gen, millennials and below. We're not thinking about retirement. We're thinking about let's find something that we enjoy, that we can have financial independence. I think that's a better way to think about the end of life stage versus quote unquote retirement.

8:43Scarlet Fu:Let's talk about health care for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together.

9:21Scarlet Fu:Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions, Optum is working to bring costs down, save patients' money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. Hablemos del servicio telefónico. ¿Por qué todas estas compañías actúan como si ellas mandaran? Contratos raros, precios turbios, cargos escondidos. Acaba con eso. Descarga TextNow. Llamadas ilimitadas. Mensajes de texto ilimitados. Y agregas datos cuando tú decidas que lo necesitas.

9:575G a nivel nacional. Las mismas torres. Sin sorpresas en la factura. Sin contrato fijo. Descarga TextNow. Y mantén tu dinero donde debe estar. Contigo. Llamadas y mensajes de texto gratis a través de la app TextNow. Requiere conexión Wi-Fi o de datos. Los planes de datos se venden por separado. 5G donde esté disponible.

10:14Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern.

10:28Scarlet Fu:All right, let's go back to the Dell story. I look at the shares, and the shares are on a downtrend right now, at least for this morning, down 2.5 % for$119. Woo Jin-ho, we've been promising that he'd come over and make us smarter on this. Woo Jin-ho is Senior Technology Analyst at Bloomberg Intelligence. The CFO, Yvonne McGill, stepping down after two years in the role. What does the share price drop reflect exactly, Woojin? Is it fear that a key member of the management team is leaving and others might follow her? What do you think is going on? Yeah. Hey, Scarlett. So I think it's more along the lines of the timing of her departure.

11:08Keep in mind that these guys reported two weeks ago. That could have been a time where she could have announced her resignation. And the analyst day is about a month away. There was another that's another time she could have set the numbers straight there and then resigned there. So it's just more of a timing aspect of it than anything else. I think what brings a little bit of confidence to the shares is that the company reaffirmed the third quarter guidance as well as a full year guidance for for all intents and purposes. And that's backed by the COO, Jeff Clark, and the CEO, Michael Dell. Hujan, why did McGill leave?

11:43Do we know? Why did she resign? No one knows. On the analyst callback last night, the reasoning was more along the lines of she's been at Dell for over 30 years. And she took Dell through multiple transitions, and it seemed like a case of burnout. I mean, it's really tough to say what the personal reasonings may be, but we don't think there's another job that she may be going after, given that she is going to be sticking around for an interim period. But it may have been more for personal reasons than anything else.

12:19Scarlet Fu:Okay, so it may have been more for personal reasons than anything else. Tell us a little bit more about Dell's prospects right now. You mentioned that they reaffirmed their guidance, so that should be somewhat soothing to investors. And they had just reported earnings where they beat earnings estimates, yet the stock was down nonetheless. Does that mean that perhaps there's a little bit of rebalancing here in terms of expectations for what Dell can achieve going forward? Yeah, so let's address both. Let me address the CFO search first. As I noted in my comments yesterday, my written comments yesterday, look, they have a deep bench, right?

12:55And the person coming in to take the interim role, I think David Kennedy, he's the CFO of their consumer solutions group, which pretty much handles the PC group. So he's easily slide right in as well as Jeff Clark being a steady hand on the CEO role. He knows the finances of the company well. Are they going to look internally or externally? I don't know. I mean, I wouldn't be surprised if they just appoint Mr. Kennedy as a CFO ultimately, but we'll see what happens. Now, you actually bring a pretty good question, right? The company is evolving. You know, if we think about the company's business model, AI just came out of nowhere, you know, prior, you know, right after Yvonne took the CFO role.

13:48And that business is going to be as large as a traditional services server business in about a year or so. And however, that comes with lower margin. So there is going to be a margin aspect of the business that the new CFO will need to manage going forward. On top of that, a pretty, I guess, stable but competitive PC market going forward.

14:12Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. Let's talk about health care for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together.

14:56Scarlet Fu:Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions, Optum is working to bring costs down, save patients money and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how. Hablemos del servicio telefónico. ¿Por qué todas estas compañías actúan como si ellas mandaran? Contratos raros, precios turbios, cargos escondidos. Acaba con eso. Descarga TextNow. Llamadas ilimitadas. Mensajes de texto ilimitados. Y agregas datos cuando tú decidas que lo necesitas.

15:315G a nivel nacional. Las mismas torres. Sin sorpresas en la factura. Sin contrato fijo. Descarga TextNow. Y mantén tu dinero donde debe estar. Contigo. Llamadas y mensajes de texto gratis a través de la app TextNow. Requiere conexión Wi-Fi o de datos. Los planes de datos se venden por separado. 5G donde esté disponible. Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf.

16:04Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market.

16:42Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., Member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures.

16:58Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Want to move over now and talk about our big take on Bloomberg today. it's a good one, puts forth this idea that the Trump administration is going to war with established climate science. When you consider mass firings, regulatory rollbacks, there have been funding cuts ongoing, program closures, et cetera, et cetera. Eric Rosten, Bloomberg climate reporter, one of the authors of this report on the Bloomberg Terminal.

17:39And Eric, thanks so much for joining us here in the studio. Just sort of break down for us all of these changes happening, how do they actually impact the U.S.'s ability to gather data in this area? Yeah, I'll start with that last part, right? Whether you are a mayor of a city or a head of an insurance company or a head of an agriculture company, everyone throughout the economy, public or private sector needs good information to make good decisions. And the U.S. in recent decades has had the global leadership role in developing the kinds of data that everybody needs in order to see what's coming, to set insurance rates, to understand whether we should build a house here, to understand if this flood plain is going to be like a bad place to build houses.

18:36And so that's the data we're talking about here is actionable data that people in the economy have come to rely on to make decisions. To cite one of the many examples we talk about in the story, the U.S. produces, it's supposed to be not more than every four years, national climate assessment, which is a huge amount of time. A huge amount of time. It'd take years to develop, hundreds of people to write, and thousands of papers that they're based on. And you see these reports cited in Travelers earning calls, in Chipotle earning calls and reports, in Marriott. Brands we see every day understand the material and understand the needs of this material.

19:27I'm not putting words in their mouth. I'm just pointing out that they say things like this. Those were taken away from public view. So I think that's an interesting place to start on, because like, yeah, the government like any government can be cut. Right. And save money. And it's just the nature of bureaucracy. But why are some of the most authoritative and well vetted scientific reports ever written being taken away from public view where they've been for many years?

20:02Scarlet Fu:All good questions. And I'm sure that we won't get answers to them right away either. So what does it mean if you're a company like Travelers and you're relying on that data? Can you go to private sources for that kind of information? Does that exist? That's a great question. And if we had like another two hours, I'd love to, you know, because we've spent a lot of time in the last few years on the private sectors, you know, filling a hole in useful climate data that businesses need. So the short answer is yes. Some of this data, a lot of it is like translated into the language of risk for companies.

20:45It does exist. The bigger concern is like that's a tiny fraction of what we're talking about here. You know, we're talking about, you know, very sophisticated computer models that like the entire world relies on to make sense of, you know, observations we see in weather stations and, you know, in other sources. And particularly, you know, I don't know, I'll get in trouble for saying this, but this could be described as like the most boring kind of data is also some of the most important. And that is unsexy data. Unsexy data is like continuous monitoring data. It's you know, it's very important for some kinds of data that you have a complete unbroken record.

21:36The most iconic one in this space is the CO2 measurements from Hawaii on Mauna Loa that have been going on since the late 1950s and are largely responsible for the discovery of global warming. Like that data set, one of the most famous data sets ever collected, was slated for closure in the recent White House budget.

22:02Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. Let's talk about health care for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a health care company linking patient care and pharmacy services and using data and technology to drive the whole system. so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together.

22:46Scarlet Fu:Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

23:28Where you have to be with you. Calls and messages of free text through the app TextNow. It requires Wi-Fi connection or data. The data plans are sold separately. 5G where it is available. Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip. Manually sweeping idle cash. Putting on a hedge. On Public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index.

24:06You approve of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures.