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CYPRUS MINERALS COMPANY AND AMAX INC. TO MERGE; ALUMAX INC. TO BE SPUN OFF AS A PUBLICLY HELD INDEPENDENT COMPANY

 NEW YORK, May 25 /PRNewswire/ -- Allen Born, chairman and chief executive officer of AMAX Inc. (NYSE: AMX) and Milton H. Ward, chairman, president and chief executive officer of Cyprus Minerals Company (NYSE: CYM) today announced the intention to merge the companies to create Cyprus-Amax -- one of the world's largest natural resources companies, with leading or significant positions in copper, coal, oil and gas, gold, lithium, molybdenum, iron ore, and world-wide exploration prospects. The company will be headquartered in Englewood, Colo.
 Prior to the merger, AMAX will spin off its aluminum company, Alumax Inc., into a publicly-held independent company, distributing tax-free all Alumax shares to AMAX shareholders. Also prior to the merger, AMAX will distribute an approximately 28 percent interest in Amax Gold Inc. (NYSE: AU) to AMAX Inc. shareholders. Approximately 32 percent of Amax Gold is publicly-held at this time.
 The newly merged Cyprus-Amax will have assets of approximately $5 billion, and pro forma 1992 revenues of approximately $2.8 billion. It will be the second largest copper company and the second largest coal company in the United States with significant positions in oil and gas, gold, and lithium. Alumax, the third largest aluminum producer in the United States, currently has assets of approximately $2.7 billion and had 1992 revenues of $2.4 billion.
 Milton Ward, who will become co-chairman, president and chief executive officer of Cyprus-Amax, said, "Combining Cyprus and AMAX in this manner will create the critical mass and opportunities that neither company could achieve separately. Cyprus-Amax will be well-positioned not only as an excellent copper company, but also as a modern resource- rich company, with a solid capital structure, able to compete vigorously in today's global marketplace.
 "The combined coal operations, with the ability to produce over 70 million tons of coal annually, approximately 70 percent of which will be shipped under long-term contracts, coupled with our strong oil and gas and lithium businesses, will provide a stable base of earnings and cash flow. This should ensure our ability to continue with the cost reduction and expansion programs we have underway in our copper business, even during periods of low copper prices. The interest in Amax Gold will give us the expertise and public market vehicle to better develop and realize the potential of some of Cyprus' prime exploration plays. In addition, combining our molybdenum operations will create opportunities to lower costs and enable us to become more competitive and provide greater benefits to our customers in the worldwide molybdenum marketplace.
 Ward concluded by adding, "The combination of the companies will present significant opportunities to reduce operating and corporate and divisional overhead costs. The combined companies will be operated in a manner to achieve the lowest possible costs with anticipated annual cost savings of at least $100 million. We will take the very best of both companies and create a new flat organization with the flexibility to move quickly and aggressively in pursuit of our other growth goals."
 Allen Born, who will become co-chairman and chairman of the executive committee of the board of Cyprus-Amax said, "This combination will enable AMAX shareholders to realize the true values of our metals and energy companies. Shareholders will receive stock in Alumax, in Amax Gold and in Cyprus-Amax, thereby continuing to hold their original investments in industries which offer outstanding potential for future growth.
 "The AMAX shareholders will also be able to benefit from Cyprus' substantial copper business, its current well-positioned coal and lithium businesses, and its portfolio of attractive gold exploration properties.
 "The new Alumax gives AMAX shareholders a pure play in aluminum. With its very low-cost primary aluminum smelting capacity and broad value-added downstream product lines, Alumax is well-positioned to sustain itself in current low-price markets and to prosper as the world economy recovers," Mr. Born said.
 Under the terms of the agreement, which has been approved by the boards of both companies, AMAX shares will be exchanged for Cyprus shares based on a ratio of 0.5 Cyprus share for each AMAX share, subject to an adjustment based on the trading price of Cyprus for the 20 business days prior to the closing of the merger, which could occur as early as the end of the third quarter.
 If the trading price of Cyprus shares during this period is $24 to $32 per share, Cyprus will issue one-half share of Cyprus common stock for each outstanding share of AMAX. If the average trading price of Cyprus shares is above $32, Cyprus would issue shares equivalent to $16 in value for each AMAX share but not less than 0.4 Cyprus shares. If the average trading price of Cyprus shares during this period is less than $24 per share, Cyprus will have the option to effect the merger by issuing Cyprus shares equivalent to $12 for each outstanding share of AMAX, and AMAX will have the option to effect the merger by accepting one-half share of Cyprus for each outstanding share of AMAX.
 On April 30, 1993, AMAX had 87.9 million shares outstanding and Cyprus had approximately 47.3 million shares outstanding.
 In addition to the shares, Cyprus-Amax will assume about $1.2 billion of AMAX's current long-term obligations. The balance of the AMAX's debt will remain with Alumax. In the merger, two-thirds of the $350 million AMAX preferred stock will be converted into a new class of Cyprus-Amax preferred having the same terms as the existing AMAX preferred, and convertible into Cyprus-Amax shares. The remaining third will be converted into a new class of Alumax preferred having like terms and convertible into Alumax shares.
 The transaction is subject to approval by the shareholders of both companies and to certain other conditions.
 The major features of the merged Cyprus-Amax include:
 -- Copper: With production of more than 660 million pounds of copper in 1992 from mines in Arizona, Cyprus ranks as the second largest domestic copper producer. The company spent more than $90 million to make Cyprus self-sufficient in copper smelting and has a $200 million capital expenditures program underway to reduce copper production costs. Reserves, at year-end, were approximately 2.6 billion tons of mineable ore.
 -- Coal: The merger will create the nation's second largest coal producer. Cyprus Coal produces approximately 20 million tons of coal annually from eight mines in Pennsylvania, Colorado, West Virginia, Kentucky, Utah, and Wyoming. Through Amax Coal Industries Inc., AMAX operates 13 coal mines in Indiana, Illinois, Wyoming, Tennessee, and West Virginia. Amax Coal produced more than 40 million tons in 1992 and employs 2,800 people. When two other Cyprus Coal acquisitions in Australia and Pennsylvania are completed, the new company's annual production is expected to reach 70 million tons. Approximately 70 percent of this tonnage will be shipped under long-term contract. Reserves, at year-end, were approximately 3 billion tons.
 -- Gold: Amax Gold, in which Cyprus-Amax will hold a 40 percent interest, currently has holdings in Alaska, California, Nevada, Chile, and New Zealand. Annual production is approximately 250,000 ounces. Reserves, at year-end, were approximately 8.6 million ounces.
 In addition to the 40 percent interest in Amax Gold, Cyprus-Amax's gold interests include promising prospects in Australia and in Panama. Additionally, Cyprus is in negotiations to acquire several high grade gold deposits in various locations around the world.
 -- Oil and gas: Cyprus-Amax will hold major interests in oil and natural gas through its present AMAX Oil & Gas Inc., an independent producer based in Houston. In 1992, it produced 2.8 million barrels of oil and more than 50 billion cubic feet of natural gas. At the end of the year, AMAX's proved and probable reserves totaled 865 billion cubic feet of natural gas equivalents. Cyprus has acquired natural gas interests in the last several years in the southwestern United States and has 15 billion cubic feet of natural gas in reserves.
 -- Lithium: Cyprus produced approximately 33 million pounds of lithium carbonate in 1992 from operations in the U.S. and Chile. Cyprus is the world's largest and lowest cost producer of lithium, which is used in aluminum smelting, and in synthetic rubber, specialty glass, grease, battery, and pharmaceutical production. Reserves, at year-end, were approximately 2.4 billion pounds of lithium carbonate equivalents.
 -- Molybdenum: AMAX operates the Henderson molybdenum mine in Colorado. Cyprus produces molybdenum as a by-product of its copper production in Arizona. Molybdenum is used as an alloy in steelmaking and in chemical applications. Primary reserves, at year-end, were approximately 340 million tons.
 -- Iron Ore: Cyprus produces iron ore from its Northshore mine and processing plant in northern Minnesota. The Northshore operation will produce more than three million tons this year. Reserves, at year-end, were approximately 1.2 billion long tons.
 Alumax, as an independent company, will remain the nation's third largest integrated aluminum producer. Headquartered in Norcross, Ga., Alumax operates over 100 plants and facilities in the United States, Canada and Western Europe and has 14,000 employees.
 Alumax produces and sells primary aluminum and semi-fabricated aluminum sheet, plate and foil. It is the nation's largest independent soft-alloy extrusion company and the world's leading manufacturer and marketer of architectural aluminum products and systems.
 Alumax has total annual primary aluminum capacity of 773,000 metric tons, two-thirds of which is based on lower-cost hydroelectric power.
 AMAX Inc., headquartered in New York, employs 20,000 people worldwide. Cyprus Minerals Company, headquartered in Englewood, employs 6,500.
 -0- 5/25/93
 /CONTACT: Jerry Cooper, 212-856-5982, or Dan Loh, 212-856-6007, both of AMAX Inc., or Richard Hagman of of Cyprus Minerals Company, 212-856-4223, or Mike Rounds, 303-643-5186, for Cyprus Minerals Company/
 (AMX CYM)


CO: AMAX Inc.; Cyprus Minerals Company ST: New York IN: MNG SU: TNM

TS -- NY023 -- 1998 05/25/93 08:47 EDT
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