IGO Limited (ASX:IGO) announced plans today to acquire Western Areas (ASX:WSA) A$1.096 billion (US$780 million).
Price per share is A$3.36, a 3.7% premium to WSA’s last close on 15 December 2021.
Western Area board unanimously supports the takeover.
The two companies are advancing “strategic and logical consolidation” as reason to do the deal.
IGO’s Managing Director and CEO, Peter Bradford, said the tie up will allow the company to advance many projects in development.
“IGO’s acquisition of WSA is a logical consolidation within the Western Australian nickel landscape and further
positions us on our journey to become a globally relevant supplier of metals critical for enabling a clean energy
future. Both Forrestania and Cosmos are high-grade, low-cost nickel sulphide operations and this acquisition,
together with our existing world class Nova nickel-copper-cobalt operation, will consolidate our position as
Australia’s leading independent nickel producer,” said Bradford. “The unique synergies that will be unlocked across a combined
Western Australian nickel hub, combined with the potential downstream optionality that this transaction brings,
is expected to generate substantial value for IGO shareholders over the long term.”
Western Areas is an Australia nickel producer, which claims to have two of the highest-grade nickel mines in the world. In 2021 fiscal year Western Areas had sales revenues of A$257.2M and EBITDA of A$73.5M. The company produced 16.2KT of nickel in concentrate.
IGO’s 2021 full year sales revenue was A$919 million. The company produced 29KT of nickel in concentrate.
The companies expect the transaction is expected to complete in April 2022.