OZ Minerals to be acquired by China Minmetals
Metal trader China Minmetals Corp is planning to buy Australian mining firm OZ Minerals Ltd for A$2.6 billion ($1.7 billion) in cash so as to ensure adequate supplies of non-ferrous metals.
The deal, which is intended to be completed in June, is, however, waiting for approval by Oz Minerals’ shareholders and respective governments. The company’s shareholders would hold meetings in May to decide whether the deal would go ahead or not.
The deal also needs approvals from Australia’s Foreign Investment Review Board and Department and China’s National Development and Reform Commission, the Ministry of Commerce, the State Administration of Foreign Exchange and the State-owned Assets Supervision and Administration Commission.
According to the Australian miner, Minmetals is offering 82.5cents for each share of OZ Minerals, the 50 percent higher than its last traded price on Nov 27.The offer has been recommended by the board of OZ Minerals, which is also the world’s second-largest zinc miner.
The Melbourne-based OZ Minerals operates the Century and Rosebery zinc and lead mines in Australia, the Sepon copper and gold project in Laos and the Golden Grove copper, gold and zinc project in Western Australia. It also owns the Prominent Hill copper and gold mine in South Australia and the Avebury nickel mine in Tasmania. The company’s sales revenue rose 28 percent year-on-year to$27.7 billion
By acquiring the Australian company, which owns copper, lead, zinc, gold and silver mines, China Minmetals would better secure its supply of resources, said Jiao Jian, a senior Minmetals official.
This deal also benefits the debt-laden OZ Minerals, whose market valuation has shrunk by A$6 billion since it was formed last July, is trying to find resources for refinancing of A$1.2 billion of debt by Feb 27. “OZ Minerals has been working with its financiers and making progress on various funding options to repay debt and maximize value for shareholders while providing greater certainty to employees and suppliers,” Chief Executive Officer Andrew Michelmore said in the statement. “This offer can resolve investor uncertainty.”
Minmetals’ decision to get Australian miner out of trouble comes just after Aluminum Corp of China decided to invest $19.5 billion in Rio Tinto Group.
OZ Minerals is being advised by Caliburn Partnership and Goldman Sachs JBWere. Minmetals is being advised by UBS Investment Bank.
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