Glencore Acquires Teck Resources’ Steelmaking Coal Business for $9.5 Billion

Swiss commodities firm Glencore has received final approval from the Canadian government to acquire Teck Resources’ remaining 77% stake in its steelmaking coal division, Elk Valley Resources. The deal is worth $9.5 billion (excluding closing adjustments) and supports Teck’s strategy to focus solely on metals used in global development and the energy transition.

Details

• Teck Resources, based in Vancouver, is transitioning from coal to critical metals like copper.
• Elk Valley Resources, Teck’s steelmaking coal business, will now be owned by Glencore.
• Glencore has agreed to:
  • Keep Elk Valley’s head office in Vancouver for at least 10 years.
  • Maintain regional offices in Calgary and Sparwood, B.C.
  • Ensure a majority of Elk Valley’s directors, and two-thirds of senior managers, are Canadian for 10 years.
  • Maintain employment levels at Elk Valley for at least 5 years.
• The deal was first announced in November 2023, following Glencore’s failed $25 billion hostile takeover attempt of Teck.

Financial Breakdown

• Teck will receive $9.5 billion from the sale.
• Planned use of proceeds:
  • $2.75 billion for share buybacks.
  • $2.75 billion for debt reduction.
  • $250 million for a special dividend.
  • $1 billion for taxes and transaction costs.
  • The rest will fund Teck’s copper growth projects.

Executive Comments

Jonathan Price, CEO of Teck, said, “This transaction marks a new era for Teck as a company focused entirely on providing metals that are essential to global development and the energy transition.”

Gary Nagle, CEO of Glencore, stated that the company has “made significant commitments to the Canadian government aimed at ensuring the transaction is of lasting benefit to Canada and British Columbia.”

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WATCH: Employment lawyer Lior Samfiru explains the rights workers have when their employer sells the business on an episode of the Employment Law Show.

Who pays severance if the buyer doesn’t keep certain employees?

In Canada, the “seller” of the business is responsible for providing proper compensation to staff who lose their job.

If the buyer provides you with an employment offer, and you have a good reason for why you don’t want to accept it (i.e. different hours or pay), contact an experienced employment lawyer at Samfiru Tumarkin LLP.

We’ll help you secure the severance pay you’re entitled to.

Even without a good reason you can still get severance, but it’s very likely that you will only receive your minimum entitlements.

LEARN MORE
• Sale of business in Ontario: Rights to severance
• Rights to severance in Alberta when your employer sells the business
• Employer sold the business in B.C.? Know your rights to severance

Can Glencore make major changes to the jobs of employees at Elk Valley Resources?

In Canada, non-unionized employees at Elk Valley Resources don’t have to accept substantial changes to their job that Glencore might try to enforce.

Major modifications, such as a demotion, longer shifts, or reduced pay, are illegal.

When significant adjustments are made to the terms of your employment without your consent, there’s a very good chance that you can treat it as a constructive dismissal.

In this situation, the law allows you to quit your job and pursue full severance pay.

If you believe you’ve been constructively dismissed, don’t resign before contacting our firm.

ADDITIONAL RESOURCES
• Can my employer make changes to my job in Ontario?
• Job changes in Alberta: What employees need to know
• Changes to your employment in B.C.: Your rights

New employment contracts for Elk Valley Resources staff

If you work for Elk Valley Resources in Canada, and you receive a new employment contract from Glencore, take the time to carefully review it before signing it.

In many cases, these agreements take away key protections that would otherwise be available to non-unionized employees, including:

• Eliminating past service: The new owner might attempt to reduce or eliminate your years of service with your previous employer. Don’t sacrifice your seniority. Length of service is a key factor when determining how much severance pay you are entitled to.
• Reducing severance pay: Some employers try to use a termination clause to reduce your severance entitlements to the bare minimum. Instead of months of pay, you might only receive a few weeks’ pay if you are fired without cause or let go.
• Ability to make changes: The new owner might attempt to add a clause that gives them the right to change aspects of your job (i.e. hours or pay) without your permission or lay you off without penalty.

Employers in Canada can’t legally force non-unionized workers to sign a new employment contract immediately or a few days after receiving it.

SEE ALSO
• Starting a new job? Here’s how an employment contract could limit your rights
• Employment Law Show: 5 things to know about employment contracts
• Employment Law Show: Things to never do before seeking legal counsel

Workplace issue? Talk to our team

Since 2007, the experienced employment law team at Samfiru Tumarkin LLP has helped tens of thousands of non-unionized individuals resolve their workplace issues.

Whether you’re in Ontario, Alberta, and B.C., our lawyers can review your situation, enforce your rights, and ensure you receive the compensation you deserve.

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and SHOULD NOT be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.