Under the arrangement, Western Areas shareholders will receive A$3.36 in cash from IGO for each share held.
The acquisition is aligned with IGO’s plan to focus on metals critical to clean energy. It also represents a logical consolidation of the nickel sector in Western Australia.
Western Areas’ board has unanimously recommended the deal. Perpetual, which owns a 14.7% stake in Western Areas, also agreed to vote in favour of the transaction.
WSA owns the Forrestania Nickel Operation, which comprises the Flying Fox and Spotted Quoll underground nickel mines, as well as the Cosmos Nickel Operation.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Additionally, the firm is developing an operational hub via the Odysseus Development Project. It also owns a substantial exploration portfolio.
IGO managing director and CEO Peter Bradford said the acquisition of WSA is a logical consolidation within the Western Australian nickel landscape. It would also position the firm to become a global supplier of critical metals that support a clean energy future.
Bradford stated: “Both Forrestania and Cosmos are high-grade, low-cost nickel sulphide operations and this acquisition, together with our existing world-class Nova nickel-copper-cobalt operation, will consolidate our position as Australia’s leading independent nickel producer.
“The unique synergies that will be unlocked across a combined Western Australian nickel hub, combined with the potential downstream optionality that this transaction brings, is expected to generate substantial value for IGO shareholders over the long term.”
The transaction is subject to court and WSA shareholder approval.
Western Areas chairman Ian Macliver said: “The scheme provides certainty for Western Areas shareholders today at a compelling premium in cash to the recent, undisturbed, trading prices for Western Areas shares.”
The latest deal follows the completion of IGO’s stake acquisition in Tianqi Lithium’s Australian assets earlier this year, for $1.4bn.
The transactions form part of IGO’s efforts to capitalise on surging demand for raw materials, which are used for making electric-vehicle batteries.