Australian energy group Aviva merges with Canadian mining company NEMI

23 October 2008

Western Australia-based energy group Aviva has agreed to a $22 million takeover from Canadian coal producer Northern Energy and Mining Inc (NEMI).

The takeover will combine the Peace River metallurgical coal mine, partly held by NEMI, with Aviva's proposed $1 billion Coolimba power station in Western Australia and the Mmamantswe coal project in Botswana.

The Toronto-listed NEMI will acquire all the issued share of Aviva through a scheme of arrangement, with shareholders to receive 0.59 NEMI shares - in the form of CHESS Depository Interests - for each Aviva share.

In a joint announcement, the companies said the merger ratio was ''largely in-line'' with the ratio of trailing 30-day volume weighted average prices - being C43 cents for NEMI on the Toronto Stock Exchange and 32 cents for Aviva on the Australian Securities Exchange.

 The scheme will result in Aviva becoming a wholly owned subsidiary of NEMI, with the Canadian company issuing about 70 million shares, or over 50 per cent of its current issued capital to complete the acquisition.

The merged group will maintain its primary listing on the Toronto Stock Exchange and will apply for a listing on the Australian Securities Exchange and the Botswana Stock Exchange. The companies have also agreed not to solicit a competing offer to the merger and to use their best efforts to obtain the necessary consents and approvals to put it into place.