Anglo American shares surge 9% on ‘merger of equals’ with Canada’s Teck Resources

European stocks closed slightly higher on Tuesday, with mining stocks leading gains as industry giant Anglo American unveiled a merger with Canada’s Teck Resources.

The pan-European Stoxx 600 provisionally closed 0.09% higher after a choppy end to the session. France’s CAC 40 index rose 0.2% while French bond yields ticked upward but remained off recent highs after the ousting of Prime Minister Francois Bayrou on Monday, a move widely expected by markets.

Losing the confidence vote means French President Emmanuel Macron will now have to appoint France’s fifth prime minister in less than two years. Macron is seen as likely to choose another centrist ally to lead a minority government.

London-listed shares of Anglo American jumped 9% after it was announced that the firm had agreed to merge with Toronto-listed Teck Resources to create one of the world’s top five copper producers. Teck Resources shares traded in Frankfurt closed 14.3% higher.

The new company, which will be called Anglo Teck, will be headquartered in Canada and is expected to be listed on exchanges in New York, Toronto, London, and Johannesburg.

Under the deal terms, Anglo American shareholders will own 62.4% of the combined entity, with Teck shareholders getting the remaining 37.6%.

“Anglo American and Teck believe that the formation of Anglo Teck in a merger of equals will provide exceptional and enduring benefits for Canada, including establishing a global critical minerals champion headquartered in Canada, bringing strengthened Canadian leadership in critical minerals on the world stage,” the companies said in a joint statement.