Anglo American and Codelco Settle Anglo American Sur Dispute

Anglo American plc (LSE:AAL) announced that it has settled its property dispute with Chile’s Codelco. As per a new agreement, Anglo American will reduce its 75.5 percent share in the Anglo American Sur properties to 50.1 percent, allowing a partnership between Codelco and Mitsui & Co. Ltd. (TSE:8031) to take a 29.5 percent interest.

The new arrangement will be settled through two cash transactions, as follows:

• a 24.5% shareholding in AA Sur for net cash consideration of $1.7 billion, representing a consideration of $1.8 billion, adjusted for dividends paid in relation to the shareholding since 1 January 2012 (the option exercise price for Codelco in the January 2012 option exercise window for a 24.5% interest in AA Sur, excluding shareholder loans, would have been approximately $2.5 billion). As part of this transaction, the shareholders in AA Sur have also agreed to effect the transfer from AA Sur to Codelco of certain undeveloped mining tenements to the east of Codelco’s Andina mine which are expected to offer significant synergies and value to Codelco, while being of nominal commercial value to AA Sur; and
• a 5% shareholding in AA Sur (comprising 0.9% from Anglo American and 4.1% from Mitsubishi) for total cash consideration of $1.1 billion. The Codelco/Mitsui joint venture’s acquisition of the 4.1% shareholding is subject to clearance by competition authorities in Brazil. Pending such clearance, Anglo American has agreed to acquire from Mitsubishi a 4.1% shareholding in AA Sur for cash consideration of approximately $890 million and has agreed, upon clearance, to on sell that 4.1% shareholding in AA Sur to the Codelco/Mitsui joint venture for cash consideration of approximately $890 million. This transaction will reduce Mitsubishi’s holding in AA Sur to 20.4%. In consideration for Mitsubishi’s participation in the transaction, Anglo American will also pay a fee of $40 million to Mitsubishi.

Click here to read the full Anglo American plc (LSE:AAL) press release.