MAC/20: Mines and Communities

Freeport-mcmoran Completes Phelps Dodge Takeover

Published by MAC on 2007-03-19
Source: BNAMERICAS

Freeport-McMoRan completes Phelps Dodge takeover

BNAMERICAS

19th March 2007

New Orleans-based Freeport-McMoRan Copper & Gold (NYSE: FCX) has completed its US$26bn acquisition of Phoenix-based miner Phelps Dodge (NYSE: PD), Freeport said in a statement Monday.

The merger has created the world's largest publicly traded copper-producing company, displacing Grupo México (BMV: GMEXICOB).

Under the terms of the transaction, Phelps shareholders received US$88 in cash and 0.67 of a Freeport share for a total value of US$129/share based on the price of Freeport common stock on March 16. The cash portion of the deal adds up to US$18bn, according to the statement.

Richard C Adkerson and James R Moffett are to stay on as CEO and chairman respectively, Freeport said.

Phelps Dodge president and COO Timothy R Snider will become the COO of the merged company, while Phelps CEO Steven Whisler and CFO Ramiro Peru are to step down.

PUBLIC OFFERING

After the close of the merger Freeport launched a public offering for 35mn common shares and 10mn preferred shares at US$100/share to aid in repaying the expense of the acquisition, according to a separate Freeport statement.

Phelps' South American copper operations include its 53.6% owned Cerro Verde mine in Peru, as well as its 80% owned Candelaria/Ojos del Salado mine and 51% owned El Abra mine, both in Chile.

Freeport owns the giant Grasberg copper-gold mine in Indonesia and also copper operations in Spain.

Chilean state-owned Codelco has the rest of El Abra while Japan's Sumitomo holds minority stakes in Candelaria and Cerro Verde, in the latter case along with Peru's Buenaventura (NYSE: BVN).

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