ICA approval of the Anglo American acquisition of Teck might require it to have central management and control in Canada

It is proposed that an indirect CBCA subsidiary (“ExchangeCo”) of Anglo American (a UK company) will acquire all the shares of Teck Resources in consideration for Anglo shares pursuant to a CBCA Plan of Arrangement. The Anglo shares will either be delivered by ExchangeCo directly to Teck shareholders or, in the case of resident Canadian who have validly so opted, it will issue Exchangeable Shares that are exchangeable for Anglo shares to them (with such holders being required to deliver any s. 85 election forms within 75 days of the Arrangement effective date). This Exchangeable Shares feature is unusual in that it is proposed that the Anglo shares into which the Exchangeable Shares would be exchangeable would be issued on the arrangement date to a Jersey holding company held by a special purpose trust, to be held there until the exchange right was exercised.

It may be unclear whether Teck would be an s. 212.3(10)(f) corporation. The steps seek to maximize the stated capital of the shares of "Callco" (through which Anglo holds its ExchangeCo shares) issued to Anglo.

A special dividend in the amount of $4.5 billion, as adjusted to take into account any departures from the expected ordinary course dividends to be paid by Anglo American or Teck, will be paid in order to increase the relative market capitalization of Teck from 34% to 37.6%.

As announced in a December 15, 2025 press release, the conditions imposed under the Investment Canada Act for approving the merger included the following:

• Anglo Teck's global headquarters will be located in Canada.
• A significant majority of its senior management, including the CEO, Deputy CEO, and CFO as executive directors, will have their principal offices and reside primarily in Canada.
• A substantial proportion of Anglo Teck plc’s Board of Directors will be Canadian, comprising the Anglo Teck executive directors residing primarily in Canada and other Canadian members.
• Anglo Teck will maintain a TSX listing.
• Anglo Teck will invest at least Cdn.$4.5 billion in Canada within five years, including in connection with specified initiatives.

Note that the Canada-UK treaty (and MLI replacement rule) does not have an automatic tiebreaker rule for determining the residence of a UK company that has its central management and control in Canada – only a mutual agreement clause.

Teck shareholders that own more than 2% of the outstanding Teck shares could be subject to Peruvian tax at the rate of 30% on the proportion of any gain arising from the exchange of the Teck shares for Anglo shares or Exchangeable Shares that is attributable to the value of the shares of the underlying Peruvian entity, subject to any applicable Treaty exemption.

Neal Armstrong. Summary of Management Proxy Circular of Teck Resources Limited (“Teck”) respecting its acquisition by Anglo American plc (“Anglo American”), filed on November 11, 2025 and December 15, 2025 press release of Teck and Anglo American under Mergers & Acquisitions – Cross-Border Acquisitions – Inbound – Exchangeable Share Acquisitions.