Freeport agrees to buy McMoRan for $9 billion, MMR shares up 75%
BY TATYANA SHUMSKY
NEW YORK -- Freeport McMoRan Copper & Gold Inc.'s planned acquisitions would catapult the mining company into the major league of natural-resource players, Chairman Jim-Bob Moffet said Wednesday.
Freeport has agreed to buy energy companies McMoRan Exploration Co. (MMR) and Plains Exploration & Production Co. for about $9 billion.
"It takes us from a midsize player to a major player in both the resource business and in the mining business," Mr. Moffet said on a conference call. Mr. Moffet is one of Freeport founders and is also co-chairman and chief executive of McMoRan Exploration.
"We leapfrog companies like Apache and Anadarko...we leapfrog everybody in the mining business," he said. Freeport is currently the seventh-largest mining company in the world by market capitalization.
Freeport said it will pay about $6.9 billion in cash and stock for Plains and acquire McMoRan for $2.1 billion in cash net of the 36% of McMoRan assets currently owned by Freeport and Plains.
The combined company would be able to "evaluate any natural-resource play, whether it's mining or oil and gas, and make sure that we look at investments that bring the most value to shareholders," Mr. Moffet said. "Nobody will have a better feel for valuation."
Freeport got into the oil and gas business in the 1970s but sold many of its assets in that sector in the early 1990s to help fund development of big new copper and gold discoveries in Indonesia. The predecessor of what is now McMoRan Exploration was spun off in 1994, with an aim to focus on Gulf of Mexico drilling.
News of Freeport's interest in McMoRan Exploration was earlier reported by the Financial Times.
Shares of MMR soared 75% on Wednesday. Shares of Freeport McMoRan are down 15%.
Dow Jones Newswires