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Vale to purchase Ferrous
Posted on Thursday, 06 December 2018 14:27
Brazilian miner Vale has agreed to acquire Icahn Enterprises-owned Ferrous Resources for USD 550.00 million, including debt.
The target owns and operates iron ore mines closely located to the Rio De Janeiro-based acquiror’s operations in Minas Gerais, Brazil.
Closing is currently slated for 2019 and remains subject to antitrust approval, among other conditions.
Vale said it will release further details at its London Vale Dy presentation later today.
Icahn Enterprises acquired its first stake in Ferrous in 2012, before taking control of the company in 2015.
Vale’s plan is to merge with the target following completion, adding five mineral assets in Minas Gerais’ iron quadrangle and another operation in that state of Bahia.
The acquiror claims to be one of the world’s largest miners, particularly in the field of nickel.
Shares in Vale declined slightly to USD 13.30 at 08:22 just after the acquisition was announced earlier today, giving the business a market capitalisation of USD 70.39 billion.
This represents the first purchase for the buyer since August last year, when it paid BRL 5.91 billion (USD 1.53 billion) for iron mining exploration and production group Valepar.
During the third quarter ended 30th September 2018, Vale recorded a 12.0 per cent increase in total earnings before interest, taxes, depreciation and amortisation of USD 4.40 billion, with free cash flow of USD 3.10 billion and net debt of USD 10.70 billion.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 1,110 deals targeting the mining (except oil and gas) industry announced worldwide since the start of 2018.
The largest of these involves Indonesia Asahan Aluminium buying Freeport Indonesia for USD 3.85 billion.
Other targets included Rio Tinto’s Kestrel mine and its Bowen Basin mines in Australia, Mototolo joint venture company and Arizona Mining.
© Zephus Ltd