Another Mining Mega Merger:

Freeport-McMoRan Copper& Gold Inc. (FCX) has made a takeover offer for Phelps Dodge Corporation (PD) the deal has an estimated value of $26 billion. Phelps Dodge shareholders will receive $88.00 in cash and 0.67 common shares of Freeport-McMoRan for each Phelps Dodge share tendered, the cash portion represents about 70% of the total offer.

The combined company will be the second largest copper producer on the planet with combined reserves of 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum (moly). The new company has annual production capacity of 3.7 billion pounds of copper, 1.8 million ounces of gold and 69 million pounds of moly.

The combination will have very strong cash flow of $5.5 billion annually and revenue of approximately $16.6 billion. The company will be geographically diverse with operations in North & South America, Africa and Indonesia. The Freeport-McMoRan Grasberg Mine in Indonesia is the worlds largest copper & gold mine when measured by reserves.

This merger will create a global powerhouse in the production of base metals and will enhance the potential for future growth opportunities.

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