Merging Aussie miners to pursue
major buyouts
SYDNEY: Australian miners Zinifex and Oxiana will be looking at major acquisitions once their A$12 billion (K30.5 billion) merger goes through, Zinifex chief exective Andrew Michelmore said yesterday.
The size of the merged group, which will be the world’s second-largest producer of zinc and a substantial producer of copper, lead, gold and silver, would enable it to look at acquisitions of up to A$4 billion (K10.9 billion), he said.
“I think both of us have been looking at how to grow our businesses,” Michelmore told the Australian Broadcasting Corp.
“There are some smaller opportunities, but there are some bigger opportunities, and I think they are a big step for each of the companies standing alone.
“If we put the two companies together, that’s a much lower-risk opportunity for us, much better to fit into the portfolio, and I think that’s what size does.”
The two companies announced last week they had agreed to a “merger of equals”, with shareholders of both miners taking a 50% stake each in the merged entity.
The group will be renamed once the merger is approved by shareholders and implemented in June or July, the companies have said.
The merged company would be looking to further build its copper and zinc base, but it will look also for other opportunities, Michelmore said.
“We certainly like copper and zinc, we like the futures of them, so we’ll continue to build those as our base blocks. But we certainly like other metals. Both of us like nickel.”
Zinifex has made a recommended A$852 million (K2.3 billion) takeover offer for nickel miner Allegiance Mining NL.
Both Zinifex and Oxiana have been seen as possible takeover targets by major global miners such as Switzerland’s Xstrata, and Michelmore did not rule out the combined company facing a bid.
“You can never say never. I think one of the things we’re seeing as we put information together is that the combined company is an even better opportunity for someone to pick up,” he said. – AAP
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