South Africa’s Sibanye Gold has agreed to acquire US-based palladium and platinum mining company, Stillwater Mining, in a deal worth $2.2bn.
Under the terms of the deal, Sibanye’s US-based subsidiary will acquire all of the outstanding shares of Stillwater for $18 per share in cash.
Stillwater currently operates two underground PGM mines including the Stillwater Mine and the East Boulder Mine as well as the Blitz organic growth Project and the Columbus Metallurgical Complex.
Sibanye said that the deal represents a transformational opportunity to acquire high-quality, low-cost, PGM assets at a favorable point in the cycle.
Sibanye CEO Neal Froneman said: “The Transaction is consistent with Sibanye’s strategy of creating superior value for all of our stakeholders by enhancing the cash flow generation through value accretive growth, which underpins our strategy of paying sustainable, industry-leading dividends.”
Scheduled to be completed in the second quarter of 2017, the transaction is subject to Stillwater and Sibanye shareholder approval as well as applicable regulatory approvals in the US and South Africa.
In addition to providing near term, organic, low-cost growth through the Blitz Project, the deal is expected to provide a “mine-to-market” PGM business through Sillwater’s Columbus metallurgical processing complex.
Froneman added: “This Transaction balances Sibanye’s portfolio operationally and geographically with the addition of a world-class operation in an attractive mining jurisdiction. We have been most impressed with the workforce at Stillwater, and look forward to the opportunity of working with them.”