2013-01-04 15:33:44 - Freeport - McMoRan to Acquire Plains Exploration & Production for US$6.9 Billion and 64% Stake in McMoRan Exploration for US$2.1 Billion to Add Oil and Gas to its Natural Resources Portfolio - Deal Analysis - a new market research report on companiesandmarkets.com

Freeport - McMoRan to Acquire Plains Exploration & Production for US$6.9 Billion and 64% Stake in McMoRan Exploration for US$2.1 Billion to Add Oil and Gas to its Natural Resources Portfolio - Deal Analysis - Freeport-McMoRan Copper & Gold Inc. (FCX), a mineral exploration company, has agreed to acquire Plains Exploration & Production Company (PXP) for a purchase consideration of US$6.9 billion and a 64% stake in McMoRan Exploration Co. (MMR) for a purchase consideration of US$2.1 billion. PXP´s acquisition by FCX involves a total consideration of US$6.9 billion, of which FCX will pay US$3.4 billion in cash and the remaining US$3.5 billion through the issuance of approximately 91 million shares of its common stock. The deal represents a revenue

 

 

multiple of 3.12x and an Earnings before Interest Tax Depreciation and Amortization (EBITDA) multiple of 5.21x. The acquisition of a 64% stake in MMR by FCX involves a purchase consideration of US$2.1 billion. Currently, FCX, along with PXP, holds a 36% stake in MMR. FCX has received US$9.5 billion in financing commitments from JPMorgan Chase Bank, N.A. to fund the cash portion of the acquisition and to repay debt outstanding under PXP´s existing term loans and revolver.

Scope

- Rationale behind Freeport-McMoRan (FCX) acquiring Plains Exploration & Production (PXP).
- To understand the rational behind Freeport-McMoRan (FCX) in acquiring 64% stake in McMoRan Exploration (MMR).
- Geography Covered- US.

Reasons to buy

- Develop a sound understanding about FCX acquiring PXP and MMR to add oil and gas assets to its portfolio of natural resources.
- To know more about FCX gaining 575 mmboe of proved oil and gas reserve from the two acquisitions.
- To have an understanding of PXP and MMR shareholders realizing the value of their investment and gaining access to the assets of FCX.

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