BHP and Lundin Mining to acquire Filo Corp for $4.52b

BHP (ASX: BHP) and Lundin Mining Corporation have agreed to acquire Toronto Stock Exchange (TSX) listed Filo Corp through a Canadian plan of arrangement.

Total consideration for the acquisition is $4.52b (C$4.1b) and BHP’s total cash payment for the transaction is expected to be around $3.2b (US$2.1b).

This values Filo Corp at $36.36 (C$33) per share, a 32.2% premium to its 30-day volume weighted average price on the TSX.

The acquisition will be implemented by a court-approved plan of arrangement and requires Filo Corp shareholders in accordance with Canadian corporate and securities laws.

BHP chief executive Mike Henry says the proposed transaction builds on its relationship with Lundin Mining.

“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 Vicuña district and the possible pathways for development of the Filo del Sol and Josemaria projects,” he said.

“This transaction aligns with BHP’s strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value.”

Following the acquisition, BHP and Lundin Mining have agreed to form a 50/50 joint venture to hold the Filo del Sol and Josemaria projects.

This joint venture will create a long- term partnership between BHP and Lundin Mining to jointly develop an emerging copper district with world-class potential.

Currently, Lundin owns 100% of Josemaria, with BHP to acquire 50% for cash consideration of around $1.05b (US$690m).

“The joint venture with Lundin Mining will advance the development of the Vicuña district, which offers the potential to become a major contributor to the economy of Argentina for decades to come,” Mr Henry said.

“At the same time, by partnering with Lundin Mining, BHP is continuing to invest in the growth of a robust mining sector in Canada.”

Upon completion of the Filo Acquisition, BHP and Lundin Mining will each own 50% of Filo Corp.