Freeport-McMoRan (FCX) Completes $16.3B Plains Exploration Deal

May 31, 2013 8:25 AM EDT Send to a Friend
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) today announced that it has completed its acquisition of Plains Exploration & Production Company (NYSE: PXP), adding a high quality portfolio of U.S.-based oil and gas assets to its global mining business.

This approximate $16.3 billion transaction included the assumption of $9.7 billion of PXP debt as of March 31, 2013, the payment of approximately $3.3 billion in cash ($25 per PXP share), the issuance of approximately 91 million shares of FCX common stock (0.6531 shares per PXP share), equivalent to a value of approximately $2.9 billion based on the closing price of FCX’s common stock on May 30, 2013, and the value of the $3 per share PXP special cash dividend paid on May 31, 2013. After giving effect to the transaction, FCX has approximately 1,038 million shares outstanding.

The transaction creates a premier U.S.-based natural resource company with an industry leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. The addition of a high quality, U.S.-focused oil and gas resource base provides exposure to energy markets with positive fundamentals, strong margins and cash flows, exploration leverage and financially attractive long-term investment opportunities. The portfolio of assets includes established oil production facilities in California, a growing production profile in the onshore Eagle Ford trend in Texas, significant production facilities and growth potential in the Deepwater Gulf of Mexico and large onshore resources in the Haynesville natural gas trend in Louisiana.

As previously reported, FCX’s acquisition of McMoRan Exploration Co. (NYSE: MMR) is expected to close on June 3, 2013, subject to MMR shareholder approval at the special meeting set for June 3, 2013. MMR is an industry leader in the emerging shallow water, ultra-deep natural gas trend with sizeable potential, located offshore in the shallow waters of the Gulf of Mexico and onshore in South Louisiana. The MMR portfolio is expected to provide a large, long-term and low cost source of natural gas production.

EXCHANGE OF PXP COMMON SHARES

Effective as of the close of trading on May 30, 2013, PXP's common stock (NYSE: PXP) will no longer trade. As previously reported, based on the May 31, 2013 closing date and pursuant to the proration formula set forth in the merger agreement:

* PXP stockholders that elected to receive FCX common stock will receive shares of FCX common stock at an exchange ratio of approximately 1.4302 shares of FCX common stock for each share of PXP common stock.
* PXP stockholders that elected to receive cash will receive $46.01 in cash for each share of PXP common stock.
PXP stockholders who did not make a valid election or did not deliver a valid election form prior to the election deadline will receive approximately 99.5 percent of their merger consideration in cash equal to $46.01 for each share of PXP common stock and the remainder of their merger consideration in shares of FCX common stock at an exchange ratio of approximately 1.4302 shares of FCX common stock for each share of PXP common stock.

No fractional shares of FCX common stock will be issued, and PXP stockholders will receive cash in lieu of fractional shares.


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