Oct 12 2005
Inco Limited and Falconbridge Limited have announced that their respective Boards of Directors have approved the acquisition of all the outstanding common shares of Falconbridge by Inco by way of a friendly take-over bid. The combined organization, which will be known as Inco Limited, will be one of the world’s premier mining and metals companies in both nickel and copper, with one of the mining industry’s most attractive portfolios of low-cost, profitable growth projects.
The two companies have entered into a support agreement covering this offer. Inco will offer Cdn. $34.00 in cash or 0.6713 of an Inco Common Share plus Cdn. $0.05 in cash for each Falconbridge common share. Falconbridge’s common shareholders will have the right to elect to receive all cash or all Inco Common Shares (plus Cdn. $0.05 per Falconbridge Common Share), subject to pro ration based upon the maximum amount of cash and Inco Common Shares offered. Under the terms of this offer, the maximum amount of cash to be paid by Inco will be approximately Cdn. $2.87 billion, and the maximum number of Inco Common Shares to be issued will be approximately 201 million, taking into account the conversion of Falconbridge’s outstanding convertible debt securities and outstanding share options. Assuming full pro ration of these maximum amounts, this would mean Cdn. $7.50 in cash and 0.524 of an Inco Common Share for each Falconbridge Common Share subject to the offer. Inco currently plans to redeem Falconbridge’s junior preferred shares in conjunction with the acquisition of Falconbridge, with Falconbridge’s other preferred shares remaining outstanding after the completion of the acquisition.
The combined company expects to immediately achieve significant synergies and cost savings and currently estimates that these will total U.S.$350 million per year by the end of 2007. These synergies and cost savings will come from realizing efficiencies in overlapping operations, better use of mining and processing facilities in Canada, improving procurement practices, building a common information technology base, incorporating best practices, and capital expenditure savings.
http://www.inco.com