(Reuters) - South Africa’s Impala Platinum Holdings Ltd (Implats) (IMPJ.J) said on Monday it would buy Canada-based North American Palladium Ltd (PDL.TO) for about C$1 billion ($751.77 million), marking the miner’s first purchase outside of Africa.
Prices for Palladium XPD=, widely used in vehicle exhausts to reduce harmful emissions, have doubled from a low in August last year as tighter environmental regulations force carmakers to buy more of the precious metal.
“(The acquisition) not only signals our confidence in the prevailing platinum group metals (PGM) market but it also expedites our transition to a high-level multinational producer,” Implats Chief Executive Officer Nick Muller said on a media call.
Implats pursued North American Palladium for three years, and the deal adds the Lac des Iles Mine in Thunder Bay, Ontario to the South African company’s portfolio.
“It provides us with access to a well-established operational asset that employs bulk mining methods and occupies an attractive position on the industry cost curve,” Muller said.
Canadian investment manager Brookfield Business Partners LP (BBU_u.TO) will get C$16 per share in cash for the about 81% of North American Palladium owned by the investor and its partners.
Other minority shareholders of the Canadian company will receive C$19.74 per share, the same price as the stock’s Friday closing.
Implats said it will finance the deal using cash and a bridge loan facility.
Reporting by Shariq Khan in Bengaluru and Tanisha Heiberg; Editing by Sriraj Kalluvila