Phelps Dodge said in a Sunday news release FCX will acquire PD for approximately $25.9 billion in cash and stock. The transaction is expected to close in the first quarter of 2007.
The Phelps dodge and FCX boards of directors each unanimously approved the terms of agreement and have recommended their shareholders approve the transaction. The deal is subject to approval of both company’s shareholders, regulatory approvals and customary closing conditions.
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PD is also in the process of developing another copper mine near Safford. The copper giant also has operations in Globe-Miami.
It employs about 5,500 people in Arizona, of which 2,500 work at the Morenci mine. The company has an estimated $2.6 million impact on Arizona’s economy.
Kimball Hansen, Phelps Dodge communications director, said plans for the Safford mine will continue uninterrupted.
“It is an important part of the company's resource portfolio, and we look forward to producing copper starting in mid-2008,” Hansen said. The combined company’s copper production growth is expected to be about 25 percent over the next three years.
A building boom and overall economic growth in China have been at the heart of increased demand for copper. Industry analysts have not forecast any decline in China’s economy in the immediate future.
Stock shares
Under the terms of the transaction, FCX will acquire all of the outstanding common shares of Phelps Dodge for a combination of cash and common shares of FCX for a total consideration of $126.46 per Phelps Dodge share. Each P-D shareholder would receive $88 per share in cash, plus .067 common shares of FCX. That represents a premium of 33 percent to Phelps Dodge’s Nov. 17 closing price and 29 percent to its one-month average price at that date.
The cash portion of $8 billion represents approximately 70 percent of the total consideration. FCX would in addition deliver a total of 137 million shared to Phelps Dodge shareholders. That would result in P-D shareholders owning about 38 percent of the combined company on a fully diluted basis.
J. Steven Whisler, Phelps Dodge chairman and chief executive officer, said, “This transaction provides Phelps Dodge shareholders a significant premium for their shares and gives them the opportunity to participate in the upside potential of a geographically diversified industry leaders possessing the scale and asset quality to compete on the global stage successfully.”
He added, “I believe our management team, with its industry-recognized reputation for operational excellence and technological innovation, possesses the skills in open pit and underground mining and mineral processing to add value to FCX operations. We look forward to working with FCX to realize all of the benefits of this combination, and its exciting portfolio of growth and expansion projects, for our shareholders, customers, employees and suppliers.”
Long haul
Phelps Dodge is observing its 125th year in mining, which began in Clifton-Morenci. The company also has operations in Colorado and New Mexico in addition to South America and Africa.
FCX presently operates the world-class Grasberg mine in Papua, Indonesia, which is the world’s largest copper and gold mine in terms of reserves. It smelts and refines copper concentrates in Spain and Indonesia.
The news release said the combined company of P-D and FCX will represent one of the most geographically diversified portfolios of operating, expansion and growth projects in the copper mining industry. The company’s increased scale of operations, management depth and strengthened cash flow is expected to provide an improved platform to capitalize on growth opportunities in the global market.
Comments
13 comment(s)Tricia Wenzl wrote on Sep 20, 2008 4:32 PM:
ciara wrote on Jul 17, 2008 9:06 PM:
Warnar Moll Amsterdam The Netherlands wrote on Jul 14, 2008 11:20 AM:
In literature there are many scientific indications that the preparation of the sacred liquid (Haoma),could not contain a Hallucinogen-Entheogen drug (cf publications of Harry Falk, Jan Houben, Frits Staal and the late Mary Boyce).
As a plant-physiologist and toxicologian, I did some study about the preparation of Parahom (as described in Avesta). From the scientic point of view it is impossible that the sacred drink is hallucinogen.
I do not understand the arguments of the Pima's Church of Cognizance.
It is as stupid as the assert: Jesus used Marihuana. "
tom wrote on Apr 19, 2008 3:15 PM:
F THE SYSTEM!!! wrote on Feb 14, 2008 9:15 AM:
LaVae McClellan wrote on Feb 5, 2008 1:51 PM:
joe tapia wrote on Dec 9, 2007 8:05 PM:
JOE TAPIA wrote on Dec 9, 2007 12:11 AM:
Katelynn Nichols wrote on Dec 7, 2007 5:34 PM:
Stephen wrote on Nov 30, 2007 8:57 AM:
SMSmom wrote on Nov 9, 2007 12:11 PM:
Keisha wrote on Oct 27, 2007 8:03 PM:
linda wrote on Oct 26, 2007 11:59 AM: