Shareholders approve Freeport-McMoran's proposed $25.9bln takeover of copper rival Phelps Dodge
Source: Associated Press
metalsplace.com
Freeport-McMoRan Copper & Gold Inc.'s $25.9 billion cash-and-stock acquisition of rival Phelps Dodge Corp. was approved Wednesday by shareholders of both companies. The deal would create the world's largest publicly traded copper company.
In separate votes by shareholders of New Orleans-based Freeport and Phoenix-based Phelps Dodge, the buyout was approved by about 98 percent of the votes cast, the companies said in a joint statement.
The deal is expected to close next Monday the companies said.
Phelps Dodge shareholders will receive $88 in cash, or a total of $18 billion, and 0.67 percent of a share of Freeport's common stock for each Phelps Dodge common share – the equivalent of $125.53, based on Freeport's closing price on Tuesday.
Following the acquisition, there will be about 334 million outstanding shares of Freeport stock, the company said. In announcing the deal on Dec. 10, the companies said Phelps Dodge shareholders would have about 38 percent of the company on a fully diluted basis.
"This is an exciting time for our company as we transform FCX into the world's largest publicly traded copper producer," said Richard Adkerson, Freeport's president and chief executive officer.
The combination will operate as Freeport-McMoRan Copper & Gold, though businesses operating as Phelps Dodge will continue under that name. Anderson will be the CEO of the merged companies.
Phelps Dodge's chief executive officer, J. Steve Whisler, said he was confident that the combination would be "very successful."
"Business conditions change. Business conditions evolve. This creates a much stronger player in this sector. They're going to be able to compete in an ever consolidating industry," Whisler said.
Freeport officials have said they do not expect any job cuts or facility closures since the two companies' operations do not overlap. Phelps Dodge has about 15,000 employees, while Freeport has about 10,000, mostly in Indonesia, said Freeport spokesman Greg Probst.
The company's headquarters will be in Phoenix, though Freeport has said it will maintain a New Orleans office for accounting and administrative functions for its operation of the Grasberg mine in Pampua, Indonesia. That mine is one of the world's largest precious metals 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 Fungurme in the Democratic Republic of the Congo.
In 2006, Freeport earned $1.4 billion, or $6.63 per share, on revenue of $5.79 billion. Phelps Dodge posted 2006 earnings of $3.02 billion, or $14.83 per share, on revenue of $11.91 billion.
In terms of production, the world's largest copper company is Codelco, or Nacional del Cobre de Chile, owned by the country of Chile.
In afternoon trading on the New York Stock Exchange, Freeport shares rose 36 cents to close at $56.38 while Phelps Dodge shares rose 46 cents to $125.71. |
