Anglo American and Teck Resources have agreed to a merger of equals, creating a new Canadian-headquartered mining giant focused on copper.
The new company, to be called Anglo Teck, will be one of the world's top five copper producers, the companies said in a joint statement on Tuesday.
Under the deal's terms, Anglo American shareholders will own approximately 62.4% of the combined entity, with Teck shareholders holding the remaining 37.6%.
Anglo American also plans to pay a special dividend of $4.5 billion to its shareholders before the transaction is finalized.
The companies expect the combination to generate $800 million in annual pre-tax synergies.
The move is part of a wider strategic overhaul for Anglo American, which has been simplifying its portfolio by exiting other commodities to concentrate on copper, premium iron ore and crop nutrients.
"We are unlocking outstanding value both in the near and longer term - forming a global critical minerals champion with the focus, agility, capabilities and culture that have characterised both companies for so long," Anglo American Chief Executive Duncan Wanblad, who will lead the new company, said in a statement.
The transaction is subject to shareholder and regulatory approvals and is expected to close in 12 to 18 months.
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