The U.S. Department of Justice has granted approval for Inco‘s (N-T, N-N) proposed acquisition of Falconbridge (FAL-T, FAL-N) after agreeing to the pair’s recently inked deal to sell Falco’s high-grade Nikkelvery nickel refinery in Norway.
“We are pleased with the conclusion of the U.S. Department of Justice’s review and clearance of the pending combination of Inco and Falconbridge and that we are now one step closer to completing the acquisition,” said Inco CEO Scott Hand in a prepared statement.
Earlier this month, Inco and Falco agreed to sell Nikkelverk to LionOre Mining International (LIM-T, LIM-A, LOR-L) for US$650 million. The sale is aimed at alleviating concerns that the enlarged company would have a stranglehold on the superalloy and nickel-plating markets.
The Nikkelverk facility has an annual capacity of around 85,000 tonnes of refined nickel, 39,000 tonnes of refined copper plus cobalt, platinum group metals, gold and silver. LionOre would also pick up Falconbridge’s marketing and custom feed organizations that market and sell Nikkelverk’s finished nickel and other products. The offices in Brussels, Tokyo and Pittsburgh also arrange third-party feed for the facility.
The plan also calls for the enlarged Inco to continue to supply 60,000 tonnes of nickel-in-matte annually to the refinery over 10 years.
LionOre will cover the purchase price with US$400 million in cash, accompanied by US$250 million in shares; the 49.1 million newly minted shares would give the new Inco an 18.4% stake in LionOre.
The sale hinges on both the Department of Justice and European Commission approving the marriage of Inco and Falconbridge, and Inco acquiring a controlling stake in Falconbridge.
The European Commission is expected to deliver its verdict on the merger plan by July 12. Talks regarding the final terms of the remedy continue.
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