Cloud with a Copper Lining
In a stock-for-stock deal that turned into Mexico's second-biggest merger ever, the country's largest mining company has joined Peru's top miner.
After a rough couple of years, Grupo México is
improving its financial profile with a $4 billion deal that
gives investors a more tempting opening into the world's
second-largest copper reserves.
Grupo México, headed by the reclusive Germán
Larrea, announced at the end of October terms of the
long-anticipated merger of its subsidiaries, Southern Peru
Copper Corp. (SPCC) and Minera México. The deal improves
Grupo México's finances and bolsters the groups' copper
reserves at a time when prices are high. The merger will enable
Grupo México to reduce leverage and operating costs.
Grupo México had $2.44 billion in gross debt and a
leverage ratio of 87% at the end of the September quarter. In
contrast, SPCC's leverage was 23%.
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