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Published: 5 October 2017
Glencore to buy Volcan voting shares
Glencore reached an agreement to acquire 26.73% of the total class A common shares of Volcan Compañia Minera S.A.A.
The agreement is with certain “selling” shareholders of Volcan to acquire the voting shares at US$1.215 per share for a total consideration of US$531M.
Glencore has been a shareholder in Volcan since 2004. The mining giant currently holds 18.11% of the total class A common shares of Volcan and 0.02% class B common shares, reflecting an economic interest in Volcan of 7.68% (taking into account the class B common shares and excluding treasury shares).
In order to implement the acquisition, Glencore said it intends to make an offer to all of Volcan’s shareholders via a public tender offer, or oferta pública de adquisición de acciones, subject to the laws and regulations of the Republic of Peru.
The offer will be for up to 48.19% of the total class A common shares of Volcan at an offer consideration of US$1.215 per class A common share. The selling shareholders have agreed to accept the offer for all of their shares.
Following the closing of the offer, depending on the level of acceptances, Glencore will hold between 44.84% and 66.30% of the total class A common shares, and will have an economic interest in Volcan of between 18.98% and 28.07% (taking into account the class B common shares and excluding treasury shares).
The aggregate consideration payable by Glencore will be between US$531M and US$956M, depending on the level of acceptances. This will be payable in cash on the closing of the offer, and will be funded by Glencore out of existing cash resources, the firm said. It added that the transaction is in line with Glencore’s financial policy.
“Glencore expects to make the Offer to Volcan shareholders by no later than 27 October 2017 and the Offer is expected to complete in November/ December 2017,” said Glencore.
Volcan’s operations are located in the richest polymetallic production area in Peru, producing some of the highest quality zinc concentrates. Glencore said: “The transaction will provide an increase and extension of Glencore’s zinc production profile and the opportunity for synergies with Glencore’s existing Peruvian zinc operations.”