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Teck Resources to Sell Steelmaking Coal Business to Glencore and Nippon Steel in $9 Billion Deal

Paul, Weiss is advising Teck Resources Limited in the sale of its steelmaking coal business, Elk Valley Resources (EVR), to Glencore plc and Nippon Steel Corporation. Under a deal valued at $9 billion, Teck will sell a 77% stake in EVR to Glencore for $6.9 billion in cash, and a 20% stake to Nippon Steel in exchange for its current 2.5% interest in steelmaking coal mine Elkview Operations plus $1.7 billion in cash paid at the close and in cash flows from EVR. Teck will exchange its remaining 3% interest in EVR with South Korean steelmaking company POSCO for 2.5% and 20% stakes in Elkview Operations and Greenhills Operations, respectively. Following the closing of that transaction, Teck will have no further financial interest in EVR.

Proceeds from Teck’s sale of Elk Valley Resources will be used to strengthen Teck’s balance sheet, return cash to shareholders and ensure Teck is well positioned to realize value from its copper growth portfolio. The transaction with Glencore is expected to close in the third quarter of 2024 and the transaction with Nippon Steel is expected to close in the first quarter of 2024, both subject to customary conditions and regulatory approvals.

The Paul, Weiss team is led by corporate partners Adam Givertz, Christopher Cummings and Ian Hazlett, and includes partners Suhan Shim, Andrew Krause, Aaron Schlaphoff and David Tarr, and counsel Steve Centa, David Epstein and Christian Kurtz; tax partners David Mayo and Robert Holo, and counsel Sarah Katz and Alyssa Wolpin; litigation partners Lewis Clayton, John Carlin and Joshua Soven, and counsel Daniel Mason; antitrust counsel Marta Kelly; environmental counsel William O'Brien; and executive compensation counsel Jacob Glazeski.

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