CIMIC sells 50pc stake in Thiess to Elliott-linked funds
CIMIC says the sale of a 50pc stake in Thiess to funds advised by Elliott will generate up to $1.9bn in cash proceeds.
Engineering and construction firm CIMIC Group said it agreed to sell a 50 per cent stake in its mining unit Thiess to funds advised by Elliott Advisors, capping off several months of talks between the two parties.
CIMIC said the deal would generate $1.7 billion to $1.9bn in cash proceeds, strengthening its balance sheet.
CIMIC, which in July announced that it was in talks with Elliott, said the deal valued Thiess at $4.3 billion.
CIMIC will retain a 50 per cent interest in Thiess. The unit operates open-cut and underground mining around the world, employing 14,000 people and generating more than $4.1 billion in annual revenue, CIMIC said.
“The sale agreement reflects Thiess’ ongoing strategic importance as a core activity for CIMIC,” said CIMIC Group executive chairman Marcelino Fernández Verdes.
“It capitalises on the robust outlook for the mining sector and, together with Elliott, we will pursue market opportunities in line with Thiess’ growth and diversification strategy,” he said.
As part of the deal, Elliott has the option to sell its interest in Thiess back to CIMIC between three and six years after completion.
Exercising that option would allow CIMIC to potentially repurchase Elliott’s Thiess stake at the lower of the current sale price or fair market value at that point in time.
Completion of the sale is subject to customary conditions, including financing and relevant regulatory approvals, CIMIC said. It said the transaction is expected to generate a pre-tax gain of around $2.2 billion, and a post-tax gain of around $1.4 billion.
Dow Jones Newswires
