Eike Batista and Anglo American Entered Into Exclusive Discussions
January 17 2008 - 10:23AM
Marketwired
RIO DE JANEIRO, BRAZIL (BOVESPA: MMXM3) (TSX: XMM), pursuant to
article 157 of Law 6404/76, and CVM Instruction No. 358/02, hereby
makes the following announcement:
MMX is pleased to announce that a wholly owned subsidiary of
Anglo American plc ("Anglo American") and Mr. Eike Batista have
entered into a period of exclusive discussions in relation to the
acquisition (the "Acquisition Transaction") by Anglo American of
Mr. Batista's shares in a new company to be formed ("Newco") in
connection with a proposed spin-off of certain assets and
liabilities of MMX to Newco and LLX Log�stica S.A. ("LLX"), with
the balance of assets and liabilities remaining in MMX (the
"Reorganization Transaction"). It is proposed that the
Reorganization Transaction will be a condition to the completion of
the Acquisition Transaction. The terms of the Acquisition
Transaction will also include the payment by Newco to MMX of an
ongoing royalty, commencing in 2023 for MMX Amap� and 2025 for MMX
Minas-Rio, as well as other mutual commitments of the parties.
Upon completion of the Reorganization Transaction, Newco will
hold MMX's current 51% interest in the MMX Minas-Rio System
(excluding the 51% interest in LLX Minas-Rio currently held by LLX)
and MMX's current 70% interest in the MMX Amap� System. Upon
completion of the Acquisition Transaction, Anglo American will pay
a price of approximately US$361.12 per Newco share (assuming one
Newco share for each current MMX share) or US$5.5 billion for 100%
of the issued and outstanding shares. A wholly owned subsidiary of
Anglo American already holds a 49% interest in the MMX Minas-Rio
System and in LLX Minas-Rio. After the Reorganization Transaction,
MMX will continue to be Mr. Batista's exclusive vehicle for mining
projects generally and LLX for ports and inbound logistics, in each
case for as long as Mr. Batista controls such entities. As part of
the Reorganization Transaction, MMX would also have an option to
own 50% of the first pellet plant to be built on the A�u Port.
In connection with the Reorganization Transaction, each of Newco
and LLX will be listed on the Novo Mercado and shareholders of MMX
will be entitled to hold shares in each of the three companies,
receiving one share in the capital of Newco and LLX for every MMX
share held. In addition, each global depositary receipt of MMX will
represent 1/20th of a share of each of MMX, LLX and Newco.
Closing of each of the Reorganization Transaction and the
Acquisition Transaction will be subject to a number of terms and
conditions, including board and regulatory approval and the
negotiation of definitive transaction documents. In addition, each
of Newco, LLX and MMX will be required to obtain securityholder
approval for the completion of the Reorganization Transaction.
After consummation of the Acquisition Transaction, Anglo
American will launch a tag-along offer to the minority shareholders
of Newco for the same price offered to Mr. Batista, all in
accordance with Brazilian law and the rules of the Novo
Mercado.
Eike Batista, Chairman and CEO of MMX, said: "I strongly welcome
Anglo American's globally renowned capabilities in developing and
operating assets of this size and I look forward to a productive
ongoing relationship as Chairman of the project boards of the
Minas-Rio and Amap� projects as they reach their full potential.
Our experience of working with Anglo American has reinforced my
view that Anglo American's world class expertise and its approach
to environmental and social responsibility issues positions it well
to own and operate these important assets in Brazil."
Cynthia Carroll, CEO of Anglo American, said: "I am delighted
that Mr. Batista has agreed to Anglo American's proposed price for
his shares in Newco and that we are now in exclusive talks to
acquire the Minas-Rio and Amap� iron ore projects. These two
projects are a great strategic fit for Anglo American. Our
experience of working on the Minas-Rio project since last year has
been excellent and we are pleased to be developing such an exciting
iron ore project in Brazil. Anglo American will continue to
evaluate the substantial expansion potential of these projects,
particularly given the extremely positive long term prospects for
the iron ore industry."
Further announcements will be made in due course upon execution
of the definitive transaction documents.
Credit Suisse is acting as exclusive financial advisor to MMX
and has been designated by MMX to opine on the fairness of this
transaction to MMX shareholders. Banco Ita�BBA is acting as
extraordinary advisor to the Chairman and Board of Directors.
For more information, please contact ri@mmx.com.br or visit our
website at www.mmx.com.br/ri
Contact: Luiz Rodolfo Landim Machado Executive President and
Investor Relations Officer MMX Minera��o e Met�licos S.A. Tel. 55
21 2555-5634 / 2555-5558 (portugu�s) Phone: 55 21 2555-5634 /
2555-5558 (ingl�s)
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