“I don’t know how to put this, but I’m kind of a big deal” – Ron Burgundy.
Freeport-McMoRan Copper & Gold, whihc claims to be the largest publicly traded copper company, said on Wednesday it plans to acquire Plains Exploration & Production and McMoRan Exploration in a $9 billion cash and stock deal as it looks to increase its footprint in the energy sector.
Freeport will pay $25 cash and 0.6531 shares of its common stock for each Plains share, adding up to $50 per share, or a total deal value of $6.9 billion. Freeport will pay $14.75 cash for each McMoRan share or $2.1 billion after taking into account shares in McMoRan that Freeport and Plains already own. McMoRan shareholders will also get 1.15 units of a royalty trust for each share they hold. That trust will hold a 5% royalty interest in future production from McMoRan exploration properties in ultra-deep water territories. Freeport said the new entity, on a pro forma basis, would generate almost three-quarters of its 2013 operating earnings from mining and the rest from oil and gas.
“This transaction will enable us to add assets with exceptional exploration and development potential to a world-class mining company to create a premier minerals and oil and gas business focused on value creation for shareholders,” James R. Moffett, Freeport’s chairman, said in a statement.
Freeport McMoran (FCX : NYSE : US$32.13), Net Change: -6.15, % Change: -16.07%, Volume: 145,168,133
Plains Exploration (PXP : NYSE : US$44.58), Net Change: 8.53, % Change: 23.66%, Volume: 54,488,657
McMoRan Exploration (MMR : NYSE : US$15.84), Net Change: 7.38, % Change: 87.23%, Volume: 84,350,520