* Asarco, the 3rd largest COPPER producer in the U.S., owns mines that hold about 5 million metric tons of copper resources. The 100-year-old company produced 235,000 tons of refined metal last year and had revenue of $1.9 billion, according to the statement issued by SLT.
* Sterlite was one of four companies competing to buy the assets of Tuscon, Arizona-based Asarco.
* SLT will use a combination of debt and cash (the company had $2.8 Billion in cash as of March 31st, 2008) to finance the deal consisting of assets including three copper mines, a smelter and refiners in Arizona and Texas
* According to Australian-based brokerage firm Macquarie Group, the acquired U.S. assets could add approx 20% to Sterlite's 2010 earnings
Potential Deal Hurdles:
1.) The purchase must be approved by the U.S. Bankruptcy Court, Southern District of Texas...IBN believes this process could take up to 7 months.
2.) the transaction may be challenged by Grupo Mexico SA, which controlled Asarco before it filed for bankruptcy protection in 2005 because of liabilities linked to environmental damage
http://www.bloomberg.com/apps/news?pid=20601087&sid=ae5bhkCQdio8&refer=home
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*Anecdotally, very interesting move by SLT...even at these high prices they continue to be BUYERS of Copper (makes sense as India needs massive amounts of the industrial metal to built out its infrastructure + support its thriving domestic economy)...GLAD to know there's NO dilutive secondary offering on the way since the company's using debt + cash to finance the deal...Random (scary) Thought Of Brilliance -- wonder if this near $3 Billion overseas acquisition is large enough to ruffle the feathers of U.S. politicians + regulators in an election year...
Potential Deal Hurdles:
1.) The purchase must be approved by the U.S. Bankruptcy Court, Southern District of Texas...IBN believes this process could take up to 7 months.
2.) the transaction may be challenged by Grupo Mexico SA, which controlled Asarco before it filed for bankruptcy protection in 2005 because of liabilities linked to environmental damage
http://www.bloomberg.com/apps/news?pid=20601087&sid=ae5bhkCQdio8&refer=home
---------------------------------------------------------------------------
*Anecdotally, very interesting move by SLT...even at these high prices they continue to be BUYERS of Copper (makes sense as India needs massive amounts of the industrial metal to built out its infrastructure + support its thriving domestic economy)...GLAD to know there's NO dilutive secondary offering on the way since the company's using debt + cash to finance the deal...Random (scary) Thought Of Brilliance -- wonder if this near $3 Billion overseas acquisition is large enough to ruffle the feathers of U.S. politicians + regulators in an election year...
Data Courtesy: Bloomberg
Full Disclosure: I own shares of SLT.
Full Disclosure: I own shares of SLT.
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