BHP Group Ltd and Lundin Mining Corp have agreed to jointly acquire Filo Corp for about C$4.1 billion, or around $2.96 billion.

This C$33.00 per share deal represents a premium of 32% to Filo’s 30-day volume weighted average price on the Toronto Stock Exchange for the period that ended July 11, being the day before press speculation of a transaction. It is a premium of 12% to Filo’s closing price of C$29.42 on Monday.

BHP said Filo shareholders may choose to receive cash, Lundin shares or a combination of cash and Lundin shares. Filo owns the Filo del Sol copper project, located along the border of the San Juan province in Argentina and the Atacama region of Chile.

The transaction will be implemented by a court-approved plan of arrangement and will require approval by Filo shareholders, BHP said.

The Filo board unanimously recommended that shareholders vote in favour of the deal.

BHP’s share of the consideration for the Filo buy will be about C$1.91 billion, while Lundin’s share of the consideration will be around C$859 million in cash and C$1.29 billion in Lundin Mining shares.

On closing of the Filo deal, Lundin Mining and BHP will each own 50% of Filo and the Filo del Sol project.

BHP and Lundin Mining have also agreed to form a 50-50 joint venture to hold the Filo del Sol and Josemaria projects, which are located in the Vicuna district of Argentina and Chile.

Lundin Mining owns 100% of the Josemaria project.

‘The proposed transaction builds on a multi-year relationship between BHP and the Lundin Group of companies through which we have developed a strong understanding of the resource potential of the Vicuna district and the possible pathways for development of the Filo del Sol and Josemaria projects,’ BHP Chief Executive Officer Mike Henry said.

BHP shares were down 1.2% to 2,099.00 pence early Tuesday in London. They were down 1.6% to R 496.89 in Johannesburg.

Copyright 2024 Alliance News Ltd. All Rights Reserved.