TORONTO — Xstrata PLC has taken control of Canadian miner Falconbridge, after a months-long battle for ownership of the iconic nickel company.
The Swiss-based mining giant said Tuesday it has now acquired 92.1 per cent of Falconbridge — after getting its hands on another 67.8 per cent of its outstanding common shares, in addition to the 24.5 per cent it already owned.
Xstrata also extended the expiry date of its all-cash offer from August 17 to August 25, to ensure remaining Falconbridge shareholders receive their $62.50 per share promptly.
The offer is worth $63.25 a share in cash, including a 75-cent special dividend, and values Falconbridge at $23.8-billion. Those who have tendered will receive their payment on or before Aug. 17, Xstrata said.
“Xstrata has now taken effective control of Falconbridge and both management teams are working closely together to facilitate a smooth and swift integration of the two businesses,” the firm said in a statement from Zug, Switzerland.
The announcement brings to an end one of the most heated takeover battles in Canadian history, which began last October when Falconbridge agreed to merge with fellow Canadian miner Inco Ltd.
In May, Vancouver metals firm Teck Cominco Ltd. launched a $17.8-billion, cash-and-shares bid for the Inco — less than two weeks before Xstrata, which had previously acquired a 20 per cent stake in Falconbridge, launched its own bid.
Inco and Falconbridge then negotiated a three-way deal with and U.S. copper miner Phelps Dodge Corp, but that merger fell through when the majority of Falconbridge shareholders failed to tender their shares to Inco by the late July deadline.
Inco is now a takeover target itself, with Phelps, Teck and Brazil's Companhia Vale do Rio Doce, or CVRD, all bidding for the nickel giant.
London-based brokerage Numis Securities Ltd. said the deal would be accretive to Xstrata in 2007, adding that Falconbridge “brings greater growth options across their commodity exposures and greater commodity and geographic diversification.”
Xstrata has promised to preserve for three years Falconbridge's Canadian nickel, copper and zinc mining, exploration, research and processing operations, and to not lay off workers at Falconbridge's Sudbury, Ont., operations during that time.
Falconbridge is one of the world's biggest nickel and copper producers, with 14,500 workers around the world.
On the TSX, its shares were trading up four cents at $62.41 at midday Tuesday.
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