Merged Anglo Teck Could Benefit from M&A, Stock Outperformance

Dow Jones
Sep 03

0159 GMT - It's possible that Anglo Teck--a planned tie-up of Anglo American and Teck Resources--will benefit from M&A "as either predator or prey," says Jefferies. The bank says the merged company will become one of the world's biggest and highest-quality copper miners, and has significant re-rating potential over the next two to three years. Jefferies expects a rotation out of other copper miners and into Anglo Teck, driving relative outperformance in the shares. "All things considered, and despite justifiably high expectations in the equity markets, Anglo continues to be one of our top picks in the sector," Jefferies says. "Our impression after spending time with the management team this week only reinforces this view." Jefferies thinks the merger could close before the end of this year.

 

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