Freeport-McMoRan to buy Plains Exploration, McMoRan Exploration for $9 bn
06 December 2012
Freeport-McMoRan Copper & Gold Inc yesterday agreed to buy energy explorers Plains Exploration & Production Co and McMoRan Exploration Co, for a combined total of $9 billion in a cash and stock deal.
The deal will allow the copper miner to expand its portfolio to the oil and gas sector with the acquisition of a field in the Gulf of Mexico, California and Texas.
Despite entering the lucarative energy sector, nearly three-quarters of its 2013 operating earnings would come from mining, while the rest from oil and gas.
The proposed acquisition of McMoRan Exploration will once again re-unite the two companies after they were spun off in the 1980s and 1990s from the former Freeport-McMoRan Inc.
Under the deal, Freeport said it will pay Plains Exploration $25 in cash and 0.6531 shares of its common stock for each Plains share, adding up to $50 per share, taking the deal value to $6.9 billion.
In the other deal, Freeport-McMoRan will pay McMoRan Exploration $14.75 in cash and 1.15 units of a royalty trust, which will hold a 5 per cent overriding royalty interest in future production from McMoRan Exploration's existing ultra-deep exploration properties.