M&A: China Mining Deal Flops
Jul 1, 2009
What was potentially the largest M&A deal of the year for LatAm – Chinalco’s acquisition of Rio Tinto assets including part of Chile’s Escondida copper mine – fell apart in June, taking 10% of volume with it. As part of the deal, Rio Tinto would have sold to Chinalco a 15% interest in the Escondida copper mine for $3.4 billion and a 30% stake in the La Granja copper mine in Peru for $50 million.
Blackstone, JPMorgan, Nomura and China International Capital were advising Chinalco. Morgan Stanley and Credit Suisse were advising Rio Tinto. Analysts believe Rio Tinto will likely keep its Chile and Peru assets.
Elsewhere, Cemex’s sale of Australian assets to Switzerland’s Holcim for $1.6 billion cash was good news for the company’s debtors, but not so good for shareholders, according to Mexican research firm Actinver. Proceeds will be used to pay down debt. Cemex has more than $4 billion in maturities coming up in 2009. The cement company’s total debt is $18 billion. Creditors BBVA, BNP Paribas, Citi, HSBC, Santander and Royal Bank of Scotland advised Cemex.
“[The sale] could have a positive effect on the ongoing debt negotiations as the company may pay down short-term maturities and/or holdouts that are less inclined extend maturities,” says...
Already have an account?
Subscribe
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Subscribe
Free trial
Take a free two-week trial now for the latest news, data and market analysis.
Free Trial