Freeport-McMoRan will acquire Phelps Dodge for $25.9 billion in cash and stock to create the world's largest publicly traded copper company.
November 20, 2006 (Press Release) --
For years, officials at Freeport-McMoRan Copper & Gold Inc. talked about acquiring copper miner Phelps Dodge Corp. But discussions in recent weeks sealed the deal that will create the world's largest publicly traded copper company.
The companies announced Sunday that Freeport-McMoRan will acquire Phelps Dodge for $25.9 billion in cash and stock to create the world's largest publicly traded copper company.
The world's largest copper company in terms of production is Codelco, or Nacional del Cobre de Chile, owned by the country of Chile.
Freeport-McMoRan valued its offer at $126.46 per share, well above the $95.02 closing price for Phelps Dodge shares in Friday trading on the New York Stock Exchange.
Each Phelps Dodge share would be exchanged for $88 in cash plus 0.67 of a common share of Freeport-McMoRan.
The cash portion of the transaction totals $18 billion and Freeport-McMoRan said it would issue 137 million shares to Phelps Dodge shareholders. That would give them about 38 percent of the combined company on a fully diluted basis. Freeport-McMoRan's board will also be expanded to include three independent Phelps Dodge directors.
Freeport-McMoRan said JPMorgan and Merrill Lynch have committed to funding the cash portion of the transaction, which will boost its total debt by year-end to about $17.6 billion.
The merged companies will operate under the Freeport-McMoRan Copper & Gold banner, though businesses operating as Phelps Dodge will continue to do so. Adkerson will be the CEO of the merged firms. He said he doesn't anticipate substantial reductions in work force. He did not elaborate, saying only that isn't a significant part of the agreement.
The combined company's headquarters will be in Phoenix, although Freeport-McMoRan will maintain an office in New Orleans for accounting and administrative functions for its operation of the Grasberg mine in Papua, Indonesia. The Papua mine is one of the world's largest precious metal mines.
Phelps Dodge has operations throughout the world, and is working on an $850 million expansion of its Cerro Verde mine in Peru. It also is building a $550 million copper mine near Safford, Ariz., and planning a $650 million copper mine at Tenke Fungurume in the Democratic Republic of the Congo.
In October, Phelps Dodge reported a steep rise in third-quarter profit to $888 million, or $4.36 per share, from $366.1 million, or $1.81 per share, in the year-earlier quarter.
Freeport-McMoRan more than doubled its third-quarter earnings. The company earned $350.7 million, or $1.67 per share, on revenue of $1.64 billion, compared with $165.8 million, or 86 cents per share, on revenue of $983.3 million a year earlier.
While the companies say the combination will make it the world's largest publicly traded copper company -- and the largest metals and mining company based in North America -- Adkerson said it will hardly have a corner on the market.
Source: http://www.foxnews.com/
The companies announced Sunday that Freeport-McMoRan will acquire Phelps Dodge for $25.9 billion in cash and stock to create the world's largest publicly traded copper company.
The world's largest copper company in terms of production is Codelco, or Nacional del Cobre de Chile, owned by the country of Chile.
Freeport-McMoRan valued its offer at $126.46 per share, well above the $95.02 closing price for Phelps Dodge shares in Friday trading on the New York Stock Exchange.
Each Phelps Dodge share would be exchanged for $88 in cash plus 0.67 of a common share of Freeport-McMoRan.
The cash portion of the transaction totals $18 billion and Freeport-McMoRan said it would issue 137 million shares to Phelps Dodge shareholders. That would give them about 38 percent of the combined company on a fully diluted basis. Freeport-McMoRan's board will also be expanded to include three independent Phelps Dodge directors.
Freeport-McMoRan said JPMorgan and Merrill Lynch have committed to funding the cash portion of the transaction, which will boost its total debt by year-end to about $17.6 billion.
The merged companies will operate under the Freeport-McMoRan Copper & Gold banner, though businesses operating as Phelps Dodge will continue to do so. Adkerson will be the CEO of the merged firms. He said he doesn't anticipate substantial reductions in work force. He did not elaborate, saying only that isn't a significant part of the agreement.
The combined company's headquarters will be in Phoenix, although Freeport-McMoRan will maintain an office in New Orleans for accounting and administrative functions for its operation of the Grasberg mine in Papua, Indonesia. The Papua mine is one of the world's largest precious metal mines.
Phelps Dodge has operations throughout the world, and is working on an $850 million expansion of its Cerro Verde mine in Peru. It also is building a $550 million copper mine near Safford, Ariz., and planning a $650 million copper mine at Tenke Fungurume in the Democratic Republic of the Congo.
In October, Phelps Dodge reported a steep rise in third-quarter profit to $888 million, or $4.36 per share, from $366.1 million, or $1.81 per share, in the year-earlier quarter.
Freeport-McMoRan more than doubled its third-quarter earnings. The company earned $350.7 million, or $1.67 per share, on revenue of $1.64 billion, compared with $165.8 million, or 86 cents per share, on revenue of $983.3 million a year earlier.
While the companies say the combination will make it the world's largest publicly traded copper company -- and the largest metals and mining company based in North America -- Adkerson said it will hardly have a corner on the market.
Source: http://www.foxnews.com/
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