Anglo American outlook revised by Fitch on lower leverage

In a decision announced today, Fitch Ratings changed Anglo American plc's outlook to stable from negative and affirmed its long-term issuer default rating at BBB+. The shift reflects the agency's expectation of reduced leverage, driven by robust operational performance and copper prices that are higher than earlier assumptions.

The merger with Teck remains scheduled to close by the end of the first quarter of 2027, subject to regulatory approval from China. Anglo American (LSE:AAL) has also made headway with the divestment of its coal assets and is advancing the trade sale of De Beers. Fitch projects EBITDA net leverage will stay below 1.2x during 2026-2029, providing the company with flexibility in its capital allocation.

Anglo American and Teck reported strong first-half 2026 results, supported by elevated copper prices and by-product credits arising from higher precious metals values. Fitch estimates the combined group's 2026 pro forma EBITDA at $11.5 billion, with around 75% coming from copper. The merger is expected to increase Anglo American's copper production by roughly 450,000 tonnes, bringing the combined total to 1.2 million tonnes.

Under Anglo American's simplification strategy, total disposals for 2025 reached $3.4 billion, including the Jellinbah coal asset and its stake in Valterra Platinum Limited. In May 2026, the company announced a sale agreement for its steelmaking coal assets to Dhilmar Limited for up to $3.875 billion, while the disposal of its 85% interest in De Beers is also in progress.

Fitch assumes Anglo American will maintain a conservative financial framework, with ordinary dividends of $2 billion per year from 2027 to 2029, plus a special dividend of $4.5 billion to be declared before the merger completes. The transaction has already received international regulatory approvals, but still requires antitrust clearance from China prior to closing.

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