Oil prices rebound sharply on smaller-than-feared OPEC+ output hike
Investing.com - Berenberg has upgraded Anglo American PLC (LON:AAL) from Sell to Hold and raised its price target to GBP23.00 from GBP19.00 following the company’s merger announcement with Teck Resources.
The upgrade comes after Anglo American revealed on Monday that it had agreed to a merger of equals with Teck Resources, creating what will become the world’s fifth-largest copper producer with additional exposure to iron ore and zinc.
According to Berenberg, the merger aims to unlock USD800 million in group synergies and an additional USD1.4 billion in synergies through joint operation of the Collahuasi and Quebrada Blanca mines in Chile.
The research firm noted that Anglo American’s shares rose approximately 9% on the merger news, while Teck’s shares increased by about 14%, creating what Berenberg described as "a favourable tailwind" for Anglo American shares.
Berenberg still sees challenges ahead for Anglo American’s simplification strategy, citing weak metallurgical coal prices as a potential headwind for mine sales after a deal with Peabody Energy fell through, and ongoing difficulties with the planned divestment of De Beers amid a weak diamond market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.