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Anglo Nickel sale regulatory risks are price sensitive for Anglo-Teck spread

Teck’s shares are trading at a ~7% discount to Anglo American’s merger terms, with the discount widening since Teck (covered by Bill Peterson) reduced 2025-28 guidance on 8 Oct (link). We have previously highlighted that Anglo’s Nickel asset sale to MMG could be tangentially relevant to the Anglo-Teck spread (link). European anti-trust regulators were reported to have expressed reservations regarding MMG’s $500m acquisition of Anglo’s nickel assets. This relates to MMG being a majority owned subsidiary of a Chinese state-backed mining company (China Minmetals, link). Today, Bloomberg reports that MMG is offering remedies to the EU, specifically a long-term, contracted supply of ferronickel into the EU, in order to mitigate potential EU concerns. We note that MMG has not commented on this article. Our Anglo base case is that the $500m sale will complete in Q4’25. Bloomberg states the EU’s review should be completed by 14 Nov, followed by an approval, or the start of an in-depth review. A hypothetical negative scenario for Anglo American, could be one in which the Nickel sale does not obtain a clean regulatory passage from Europe and/or other regulators, which could result in tit-for-tat determinations from global regulators for future M&A approvals. Such a scenario could be price sensitive for the Anglo-Teck spread in our view. We reiterate our view that the Anglo-Teck merger has very low interloper risk, based on our assessment of current events.