BofA-Australian Metals Mining Weekly AAL TECK scenario analysis.TECK CEO roundtable....-20250922

TECK CEO roundtable: Promoting Anglo Teck.

Teck (TECK) Resources CEO Jonathan Price was in London to meet with Teck and AngloAmerican (AAL) shareholders as well as sell-side analysts. We publish key takeaways &detailed feedback from the meeting. Key takeaways: (1) Why now? AAL platinumdisposal makes Anglo smaller, merger possible. Mining landscape is evolving quickly; (2)$4.5 bn special dividend to Anglo Shareholders: Necessary to make Anglo "small enough"for a merger of equals; (3) Votes: Early December coincidental votes. TECK A share(done), TECK B share (need two-thirds). AAL shareholders also have a vote for theissuance of Anglo shares. (need 50% to vote in favour); (4) Near-term synergies:Validated by Big 4 accounting firm. $800 mn = c. $500 mn procurement, $300 mn headoffice. Upside risk to this number? AAL London office, 700-800 people to move; and (5)QBII Update: No later than TECK Q3 results. Expect to give multi-year guidance. We rateAnglo Buy and have moved to No Rating on Teck. We see both as containing two keycopper business "of scale" that can be bid. We believe that for some large-caps, the dealannouncement represents something of a "now or never" moment. (See: TECK & AAL).

Pro forma AAL + TECK earnings analysis

We run pro-forma scenarios for the announced Anglo American (AAL) and TeckResources (TECK) merger. We believe that the combined entity would be attractive withup to 70% of earnings from copper. Our (simple) pro-forma analysis suggests newcotrading on c. 6.7x implied EV/ EBITDA in 2026 pre synergies, with the multiplepotentially as low as 5.3x assuming higher copper prices and full synergies are achieved.We believe announced deal is attractive for Anglo "as is", but we see potential interloperrisk on both sides which could drive upside. (See report: AAL Scenario analysis).