South32 Ltd (ASX:S32) announces $1.75 billion acquisition

Here's what you need to know about South32 Ltd's (ASX:S32) big buy.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This morning South32 Ltd (ASX: S32) presented an all-cash offer to acquire the remaining 83% of Canadian resources company Arizona Mining – in which they already have a 17% interest – at C$6.20 per share. The offer is worth approximately A$1.75 billion and entails a 50% premium on the target's last closing price.

Toronto-listed Arizona Mining owns the zinc-lead-silver Hermosa project, which includes two polymetallic deposits and land with potential for discovering additional reserves. According to an assessment conducted by Arizona Mining in January, Hermosa is a low cost, long life project that could deliver a very high return on investment.

Thanks to its minority share, South32 has been present on Arizona Mining's board and operations committee since May 2017, gaining deep knowledge of the business.

The transaction is not subject to regulatory approvals, and should be completed in the September quarter. The required shareholders approval looks probable as Arizona Mining directors, who own 34% of the company, have already unanimously endorsed the proposal.

Despite the news, the South32 share price fell 1.7% to $3.84 on Monday, in a generally negative day of trade for resources stocks. At the time of writing, industry peers BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited (ASX: RIO) are down 2.7% and 2.4% respectively.

Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »