A deal has been reached for Rio Tinto (RIO) to buyout Canada’s Turquoise Hill Resources
(TRQ) for $3.3 billion U.S.
The acquisition agreement will see Rio Tinto pay $33 U.S. per share for the 49% of Turquoise
Hill Resources that it doesn’t already own and comes two weeks after Montreal-based
Turquoise Hill rejected a lower offer from the British-based mining giant.
Rio Tinto has been trying to secure Turquoise Hill’s Oyu Tolgoi copper mine in Mongolia, which
holds the world’s fourth-largest copper deposits.
The purchase price, which is subject to shareholder approval, represents a 67% premium to
Turquoise Hill’s share price before Rio Tinto’s first takeover offer was made on March 11 of this
year.
Once the acquisition is completed, Rio Tinto will own 66% of the Oyu Tolgoi copper mine and
the Mongolian government will control the remaining 34%.
The deal requires two thirds of shareholders to vote in favour of it. Rio Tinto said it plans to run
a shareholder vote by year’s end.
Rio Tinto’s stock is down 16% this year and trading at $56.29 U.S. per share. Turquoise Hill’s
stock is up 69% on the year and changing hands at $27.47 U.S. a share.
