Earlier today, Hudbay Minerals (TSE:HBM) (NYSE:HBM) revealed its acquisition of Copper Mountain Mining Corporation (TSE:CMMC), creating a leading “Americas-focused copper mining company,” according to the press release issued by the companies. As a result, CMMC stock finished 18.1% higher, while HBM stock rallied 2.4%.
Deal Details
This merger will create Canada’s third-largest copper producer, generating 150,000 tons of copper annually. The all-share transaction, valued at $439 million, is expected to yield $30 million in yearly operating efficiencies and corporate synergies while being accretive to per-share metrics (all figures are in U.S. dollars unless otherwise stated). As per the terms of the deal, Copper Mountain shareholders will obtain 0.381 Hudbay shares for each Copper Mountain common share they own.
The merged entity will feature three extensive-life mines and a pipeline of organic copper expansion projects in top-tier, mining-friendly locations such as Canada, Peru, and the United States. The deal sets the stage for a “valuation re-rate” as the merged company is larger, more diversified, and will provide greater liquidity.
Subject to shareholder and regulatory approval, the transaction is expected to be completed between late Q2 and early Q3 2023.
