China’s copper producer Jiangxi Copper has signed an agreement to buy the entire equity interest in PIM Cupric Holdings (PCH), which owns a 17.6% stake in First Quantum Minerals, for $1.1bn.
Jiangxi Copper will acquire PCH from investment company Pangaea Investment Management (PIM).
The transaction is executed through Jiangxi Copper’s wholly-owned subsidiary Jiangxi Copper (Hong Kong) Investment Company (JCCHK).
PIM, which had beneficial ownership of, and control or direction over the common shares before the transaction, will not have any ownership on the common shares upon completion of the transaction.
PCH has direct ownership of 124,198,371 common shares, which represents approximately 18.015% of the issued and outstanding common shares of First Quantum Minerals.
Jiangxi Copper noted that the common shares were purchased at a price of $11.934 a share.
JCCHK may be considered a joint actor with Jiangxi Copper and the transaction is expected to be closed by the end of this year.
Reuters cited a Chinese media report as saying that Rio Tinto had joined the bidding for First Quantum Minerals.
In September, First Quantum Minerals announced that it was in negotiations with Jiangxi for a potential sale of a minority interest in its Zambian copper assets.
Under a standstill agreement signed in October, Jiangxi Copper was prevented from buying more than a 20% interest in First Quantum Minerals.
Last month, First Quantum Minerals chief executive Philip Pascall said that the company is also seeking partners for new copper projects, including a possible joint venture with Rio Tinto.