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Inmet, Lundin To Form New Copper Producer

Inmet Mining Corp. and Lundin Mining Corp. are combining to form a new copper company, Symterra Corp., with a market value of about $9.12 billion.

TORONTO (AP) -- Inmet Mining Corp. and Lundin Mining Corp. said Wednesday they are combining to form a new copper company, Symterra Corp., with a market value of about 9 billion Canadian dollars ($9.12 billion).

The new company will have five mines in Europe as well as two large copper development projects in Panama and in the Democratic Republic of Congo.

For each share held, Inmet shareholders will get 3.4918 shares of Symterra, and Lundin shareholders will get 0.3333 shares of Symterra. The bid offers no premium, the Toronto-based companies said.

Lundin Chairman Lukas Lundin, who said in October that he planned to retired in the first half of 2011, will become non-executive chairman of the new company. Current Inmet President and CEO Jochen Tilk will hold the same titles at Symterra.

"The long-term fundamentals for copper are compelling," Lundin chairman Lukas Lundin said in a statement. "Symterra provides one of the best growth profiles for copper amongst major mining companies, combined with attractive exposure to zinc and other metals."

Tilk said the deal will diversify the companies' production base and strengthen earnings.

"Symterra will have a series of long-life, low-cost mines in favorable mining jurisdictions," he said.

The deal requires approval by two-thirds of the shareholders of both companies. Shareholder votes are expected to be held in March. The board of the new company will initially include 10 directors, five each from Lundin and Inmet.

Inmet shareholders are expected to hold 53 percent of the stock in the new company, with Lundin shareholders holding the remaining 47 percent.

The largest shareholders and directors of each company have agreed to support the deal and each company has agreed to pay the other a $120 million break-up fee in certain circumstances, and granted the other a right to match any competing offer.

Leucadia National Corp., the largest shareholder of Inmet, holds a 17.94 per cent stake, while Lukas Lundin and his family trusts hold a 12.32 percent stake in Lundin.

A deal that would have seen Lundin acquired by HudBay Minerals fell apart in 2009. That deal was opposed by HudBay shareholders because it would have significantly diluted the company's stock.

Inmet has interests in four mines, including the Cayeli mine in Turkey, Las Cruces in Spain, Pyhasalmi in Finland and Ok Tedi in Papua New Guinea as well as the Cobre Panama project in Panama.

Lundin has operations in Portugal, Spain and Sweden, producing copper, nickel, lead and zinc as well as an equity stake in the Tenke Fungurume copper-cobalt project in the Democratic Republic of Congo.

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