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Molycorp wraps up Neo Material buy
Tuesday 12 June 2012

12 June 2012 - US-based rare earth oxide (REO) producer Molycorp Inc (NYSE:MCP) unveiled the completion of its CAD1.3bn (USD1.3bn/EUR1bn) cash-and-stock deal to buy Neo Material Technologies Inc (TSE:NEM), creating a top global rare earth group with full mine-to-magnetics vertical integration.

The transaction wrapped up after securing a 99.9% support from Neo Material's shareholders on 30 May, as well as clearance from Investment Canada and the Ontario Superior Court of Justice on 8 June, the buyer said.

The combined company will have 26 locations in 11 countries and a global staff of more than 2,600 employees.

Mark A. Smith, Molycorp's president and CEO who will keep his position after the deal, said the merger gives Molycorp the broadest coverage in the sector, allowing it to immediately access specialised niche markets not available to it before the transaction.

The acquisition will contribute to Molycorp's earnings and cash flow this year, while positioning the company for strong returns in the future, it said. At the same time, the strong synergies already identified and other expected to be implemented will boost Molycorp's financial performance beyond 2012.

According to the agreed terms, Molycorp is paying CAD8.05 a share cash and 0.122 of its shares for each Neo Materials share, resulting in a price per share of CAD11.30. The cash portion will cover around 71.2% of the total price, with the remaining to be paid in stock, the buyer has said.

It planned to finance the cash part of the price via cash on hand and debt, the buyer has said.
Details
Date Published: 12/06/2012
Target: Neo Material Technologies Inc
Country: Canada
Deal Size: 1.3bn (USD)
Sector: Metals/Mining
Type: Corporate acquisition
Financing: Cash & Stock, Cash & Debt, Existing resources
Status: Closed
Buyer: Molycorp Inc

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