falconbridge being bought out (further)
Xstrata buys stake in Canada's Falconbridge for 1.7 billion dollars
Monday August 15, 2005, 11:43 pm
ZUG, Switzerland (AFP) - The Anglo-Swiss mining group Xstrata said it had purchased a 19.9 percent stake in Canadian counterpart Falconbridge for 2.05 billion Canadian dollars (1.7 billion dollars, 1.4 billion euros).
Xstrata said in a statement that it had bought Brascan Corporation's holding in the Canadian mining group in order to expand its commodity portfolio in copper, and nickel mining for the first time.
"At a time of increasing competition for quality assets, the acquisition of this strategic stake has allowed Xstrata to capture one of the most significant options available in the mining industry, on terms that deliver immediate accretion in earnings," Xstrata chief executive Mick Davis said Monday.
"However, it is wrong to assume that todays acquisition will lead necessarily to an offer for the remaining common shares of Falconbridge," Davis said, adding that Xstrata was "looking at a number of opportunities".
Xstrata said the deal was being funded through existing resources, a new debt facility and a 375 million dollar debenture (convertible bond).
Falconbridge, which completed a merger with Noranda in June, has copper nickel, aluminium and zinc mines and processing plants in Dominican Republic, Canada, Chile, Jamaica, Norway, Peru and the United States.
Xstrata has been at the centre of speculation in Australia over possible hostile takeover bid for Oxian Resources.
The Anglo-Swiss group was beaten by rival BHP Billiton in a 7.4 billion dollar takeover bid for nickel, copper and uranium group WMC Resources in Australia in March.
Rising commodity prices and Xstrata's acquisition of a broader range of raw metals in recent years helped nearly it to quadruple net profit to 1.05 billion dollars (800.58 million euros) in 2004.
The company posted a 73 percent increase in attributable half-year profit for 2005 to 791 million dollars, in interim results released last week.
The group now has 24,000 employees worldwide.
wrxsti
DNL Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
