11.05.2010 | Editor: Marcel Dröttboom
London, United Kingdom – On May 10, 2010, Vedanta Resources and Anglo American announced that they have signed a definitive Share Purchase Agreement under which Vedanta will acquire Anglo American Zinc for a total consideration of USD 1338 million on an attributable, debt and cash free basis, with economic ownership transferred from 1 January 2010.
It is currently Vedanta’s intention, subject to approvals, that the acquisition be undertaken by Hindustan Zinc Limited. The transaction will be funded from existing cash resources. As at 31 March 2010, Vedanta had cash, cash equivalents and liquid investments of USD 7.2 billion. Anglo American Zinc’s assets include the 100 percent owned Skorpion mine in Namibia, 100 percent owned Lisheen mine in Ireland and the 74 percent owned Black Mountain Mining, which includes the Black Mountain mine and Gamsberg project in South Africa. For the year ended 31 December 2009, Anglo American Zinc generated, on an attributable basis, gross revenue of USD 670 million, EBITDA of USD 213 million, operating profits of USD154 million and had gross assets of USD 845 million.
The transaction is subject to customary regulatory approvals as well as competition clearance in the relevant jurisdictions. In addition, Exxaro Resources Limited, Anglo American’s black economic empowerment partner in Black Mountain Mining, holds a 26 percent interest in the company and has a pre-emptive right to match Vedanta’s offer in respect of this asset. Completion of the transaction is expected to be in stages, with separate completion dates for Skorpion, Lisheen and Black Mountain Mining. Vedanta expects to have completed the acquisition of all three companies within the next 12 months. The consideration agreed with Anglo American is based on effective economic ownership, including profits and cash flows, passing to Vedanta as of 1 January 2010. Lazard & Co., Limited acted as sole financial adviser, and Dewey & LeBoeuf LLP and Corpus Legal Practitioners acted as legal advisers, to Vedanta in this transaction..
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