Business & Finance
In the second major mining-industry deal in two days, Noranda Inc. said it will acquire the 41 percent of Falconbridge Ltd. that it doesn't already own via a stock swap. Reports valued the merger at $1.5 billion. The companies share the same address in Toronto. Together, they operate copper, zinc, aluminum, nickel, and precious metals mines or smelters in 18 countries. As a result of the earlier deal, industry giant BHP Billiton was poised to buy Australian rival WMC Resources for $7.3 billion.
Aviation Capital Group submitted a winning bid of more than $2.5 billion for Boullioun, one of the world's leading lessors of commercial aircraft, the Financial Times reported. Although owned by WestLB, a German bank, Boullioun is based in Bellevue, Wash., and has offices in London and Singapore. It leases planes to about 50 airlines. Aviation Capital is a subsidiary of Pacific Life, the largest California life insurer.
The board of RAC, a leading provider of roadside services for motorists in Britain, recommended to its shareholders that they accept a $2.1 billion takeover offer from Avia, one of the world's largest comprehensive insurance companies. If the deal is finalized, the combined company would offer car insurance coverage backed by in-house assistance should policyholders experience any type of mechanical breakdown. But The Times (London) reported that other potential suitors, notably US buyout giant Kohlberg Kravis Roberts, may yet challenge the deal.
In a merger of specialty-chemical producers, Crompton Corp. agreed to buy Great Lakes Chemical Corp. for about $1.5 billion. Crompton, based in Middlebury, Conn., makes additives and other products for industrial users. Great Lakes Chemical makes flame retardants, swimming pool chemicals, and household cleaners, among other products. The latter's headquarters are in Indianapolis.
Kerr-McGee, an Oklahoma energy company that plans to buy back $1 billion of its own stock and spin off or sell its chemicals business, rejected a financing idea by high- profile investor Carl Icahn, calling it "irresponsible." Icahn, who controls 7.6 percent of the company's stock, had proposed selling $8.75 billion worth of future oil production to finance future buy-backs. But according to company officials, Icahn's motive is to "provide ... some quick cash" for himself and his partners. A Kerr-McGee statement also said proceeds from such a sale wouldn't be applied to debt reduction, and the plan could negatively affect the company's capital structure and credit rating.