Grupo Mexico Proposes Combining Southern Copper, Asarco
July 23 2010 - 9:59AM
Dow Jones News
Mexican mining and railroads company Grupo Mexico SAB
(GMEXICO.MX) said Friday it is proposing to combine the mining
operations of Southern Copper Corporation (SCCO) and Asarco LLC in
its subsidiary, Americas Mining Corporation.
In a filing with the Mexican stock exchange, Grupo Mexico said
it has presented the proposal to the board of Southern Copper,
which runs the group's Mexican and Peruvian mining operations.
Under the proposal, Southern Copper shareholders would receive
1.237 shares of AMC for every Southern Copper share owned.
AMC would then be listed on the New York and Lima stock
exchanges, Grupo Mexico said.
The proposal would raise Grupo Mexico's stake in Southern Copper
to 100% from 80%, and the shareholders who own about 20% of
Southern Copper would have a 16.6% stake in AMC.
The proposal values Asarco at about $5.94 billion, Grupo Mexico
said.
"The transaction would give Southern Copper shareholders the
opportunity to participate in the future growth of Southern Copper
and Asarco, which would be fueled by synergies and operating
efficiencies that could be had under a common ownership and
management," Grupo Mexico said.
Grupo Mexico received control of Asarco, which has mining and
smelting operations in Arizona and Texas, after a lengthy
bankruptcy process in which the company fought off alternative
offers to acquire the U.S. concern. This year, Grupo Mexico also
recovered control of the Cananea copper mine, Mexico's largest,
after a long strike and dispute with the national mining workers
union that kept the facility shut for nearly three years.
Grupo Mexico said Southern Copper would set up a special
committee of independent directors to evaluate the proposal.
-By Anthony Harrup, Dow Jones Newswires; (5255) 5980-5176,
anthony.harrup@dowjones.com
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