The biggest mining company takeovers in the last ten years
Mining-technology.com profiles the ten biggest mining company takeovers/acquisitions completed in the last ten years, based on deal value. It’s no surprise that global mining giants Rio Tinto and BHP Billiton are on the list.
Acquirer - Rio Tinto; Target Company - Alcan (38.1bn)
Rio Tinto Canada Holding (RTCH), an indirect, wholly owned subsidiary of UK-based Rio Tinto, acquired Alcan in November 2007. The largest metals and mining deal in history was closed under the mandatory acquisition provisions of the Canada Business Corporations Act (CBCA).
RTCH now holds 100% of Alcan's outstanding shares. Rio Tinto was involved in a bidding battle for the Canadian aluminium company, which hindered its capabilities to make subsequent deals. High raw material costs and competition from China also fall behind Rio's expectations.
Acquirer - CVRD; Target Company - Inco ($13.30bn)
In October 2006, Companhia Vale do Rio Doce (CVRD) spent $13.3bn for the acquisition of majority stake in nickel production firm Inco. It corresponded to 75.66% of its outstanding shares on a fully diluted basis.
CVRD was renamed Vale in December. As a result of acquisition of Inco, Vale is currently the world's largest producer of nickel.
Acquirer - Caterpillar; Target Company - Bucyrus International ($8.80bn)
Machinery and engines manufacturer Caterpillar acquired Bucyrus International, a designer and manufacturer of mining equipment, in July 2011 for approximately $8.80bn. Both companies involved in the transaction are based in the US.
Caterpillar entered an agreement to acquire Bucyrus in November 2010. In May 2011, it issued $4.5bn worth of bonds to aid its acquisition. The company also used cash from its balance sheet and debt to fund the deal. The acquisition allowed Caterpillar to extend its surface and underground mining products and solutions to the mining industry.
Acquirer - Alpha Natural Resources; Target Company - Massey Energy ($8.50bn)
Alpha Natural Resources, a US-based producer of metallurgical coal, acquired a 100% interest in coal exploration company Massey Energy Company (now Alpha Appalachia Holdings), for $8.50bn in June 2011.
Under the agreement, Massey shareholders were allotted 1.025 shares of common stock of Alpha and $10 in cash for each share of Massey common stock. Massey stockholders owned 46% and stockholders of Alpha owned 54% of Alpha Appalachia after the deal. The contract proved to be a disaster, resulting in Alpha filing for bankruptcy in August 2015, due to consequent losses and debt burden of acquisition.
Acquirer - Barrick Gold; Target Company - Equinox Minerals ($7.65bn)
Barrick Gold, a leading mineral exploration company through its wholly owned subsidiary Barrick Canada, completed the acquisition of Equinox Minerals in July 2011, for $7.65bn.
Following the acquisition, Barrick and its affiliates now collectively own 8.79 billion Equinox shares, representing 100% of the outstanding shares on a fully diluted basis. Barrick funded the acquisition through its existing cash balances and $6.5bn in new debt. The deal contributed to the $13bn debt burden of Barrick.
Acquirer - BHP Billiton; Target Company - WMC Resources ($7.3bn)
BHP Billiton acquired 100% shares of mining and fertiliser company WMC Resources for $7.3bn in August 2005. BHP made a cash offer of A$7.85 ($6.22) a share for the entire issued capital of WMC Resources.
The acquisition of WMC Resources allowed BHP Billiton to capitalise on its existing nickel and copper businesses and add uranium to its energy product portfolio.
Acquirer - MMG; Target Company - Xstrata Peru ($5.85bn)
In July 2014, Xstrata Peru was acquired for approximately $5.85bn by a joint venture comprising MMG, GUOXIN International Investment Corporation (GXIIC), and CITIC Group Corporation.
The deal was funded by a combination of internal resources from equity contributions made by the JV partners in proportion to their respective shareholdings and external bank financing. The acquisition will significantly increase the base metal production capacity of the JV, as the acquired mine is one of the largest under development copper projects according to resource estimates.
Acquirer - Mitsubishi Corporation; Target Company - Anglo American Sur ($5.39bn)
Mitsubishi Corporation acquired a 24.5% stake in Anglo American Sur (AAS), a copper mining and smelting company, from Anglo American (AAC) for $5.39bn in November 2011. The acquisition was the result of a sales procedure started by AAC.
AAS owns the Los Bronces and El Soldado copper mines, as well as the Chagres copper smelter. The acquisition of AAS allowed Mitsubishi to increase its copper production by approximately 80% per annum in 2012.
Acquirer - Anglo American; Target Company - De Beers ($5.1bn)
Mineral exploration company Anglo American acquired a 40% interest in De Beers from CHL Holdings Limited and Centhold International, each representing the Oppenheimer family interests (CHL Group), for $5.1bn in August 2012.
Following the acquisition, Anglo American holds an 85% interest, while the Republic of Botswana (GRB) Government holds the remaining 15% interest. The deal enabled Anglo American to better consolidate its control over De Beers.
Acquirer - PEAMCoal; Target Company - Macarthur Coal ($5bn)
Peabody Energy and ArcelorMittal acquired Macarthur Coal Limited for approximately $5bn (A$4.9bn) in December 2011 through their joint venture company PEAMCoal. Macarthur Coal was subsequently delisted from the Australian Securities Exchange (ASX).
The acquisition further expanded the global presence of Peabody Energy, providing access to a resource base of metallurgical product and an extensive growth pipeline that serves the growth coal markets worldwide.