“Molycorp Inc. (MCP), owner of the largest rare-earth deposit outside of China, agreed to buy Canada’s Neo Material Technologies Inc. (NEM) for about C$1.3 billion ($1.3 billion) to increase Chinese sales and gain technology used to make magnets.
Investors will get C$8.05 in cash and 0.122 of a Molycorp share for each Neo share, Greenwood Village, Colorado-based Molycorp said in a statement yesterday. The offer is equal to C$11.19 a share based on yesterday’s closing price, representing a premium of 40 percent.
Molycorp, which held an initial public offering in 2010 to fund the restart of a California rare-earth mine, will get Toronto-based Neo’s processing factories. It also will obtain Neo’s patented Magnequench range of metal powders used to make neodymium-iron-boron magnets, which can be found in electronic motors and sensors.
The deal “puts the upstream and the downstream together in a very significant way,” Molycorp Chief Executive Officer Mark Smith said in a telephone interview. “This acquisition allows Molycorp to access 100 percent of the demand in the world now.”
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