Glencore Xstrata PLC said Sunday it agreed to sell the mining company’s Las Bambas Peruvian copper project to a Chinese consortium in an all-cash deal worth at least $5.8 billion.
The deal, one of China’s biggest mining acquisitions in recent years, follows months of tortuous negotiations over how much the copper project is worth. In a short statement Sunday evening, Glencore said it had agreed to sell its entire interest in Las Bambas to a consortium led by MMG Ltd. , a unit of state-controlled China Minmetals Corp.
The transaction is expected to close by the autumn, subject to regulatory approval and a vote by MMG’s shareholders, Glencore said.China Minmetals, MMG’s 74% majority investor, has already “irrevocably” backed the deal, Glencore said.“Today’s announcement demonstrates our commitment to maximizing value for our shareholders,” said Glencore Chief Executive Ivan Glasenberg.
“This is a transformational acquisition for MMG,” MMG Chief Executive Andrew Michelmore said. “Our investment in this project of national importance is the first step in what we see as a long-term relationship with Peru,” he said.MMG expects the deal will be completed in the third quarter of this year.
The acquisition “is not cheap,” said Helen Lau, a senior analyst with UOB Kay Hian in Hong Kong. “The market expected it to be between $5 billion and $6 billion, and this is pretty much at the high end,” she said, adding that the mine “could still be profitable.
The deal, one of China’s biggest mining acquisitions in recent years, follows months of tortuous negotiations over how much the copper project is worth. In a short statement Sunday evening, Glencore said it had agreed to sell its entire interest in Las Bambas to a consortium led by MMG Ltd. , a unit of state-controlled China Minmetals Corp.
The transaction is expected to close by the autumn, subject to regulatory approval and a vote by MMG’s shareholders, Glencore said.China Minmetals, MMG’s 74% majority investor, has already “irrevocably” backed the deal, Glencore said.“Today’s announcement demonstrates our commitment to maximizing value for our shareholders,” said Glencore Chief Executive Ivan Glasenberg.
“This is a transformational acquisition for MMG,” MMG Chief Executive Andrew Michelmore said. “Our investment in this project of national importance is the first step in what we see as a long-term relationship with Peru,” he said.MMG expects the deal will be completed in the third quarter of this year.
The acquisition “is not cheap,” said Helen Lau, a senior analyst with UOB Kay Hian in Hong Kong. “The market expected it to be between $5 billion and $6 billion, and this is pretty much at the high end,” she said, adding that the mine “could still be profitable.