"United Mining and Chemical Company" | News | Anti-trust nod for Sierra Rutile and Iluka
Anti-trust nod for Sierra Rutile and Iluka
30.11.2016The merger between mineral sands companies Sierra Rutile (LN:SRL) and Iluka Resources (AU:ILU) will go ahead after the German Anti-trust Authority cleared the deal this week.
The tie-up was announced months ago but the companies have had to wait on the nod on the £215 million (US$283 million) sale from the Germans.
Sierra Rutile is a major rutile producer with zircon and ilmenite facilities and Iluka is the world’s largest zircon producer.
The Sierra Leone-based company’s shareholders have already voted the merger through so the deal will be finished by next week, when the shares are removed from London’s AIM exchange.
In an August statement, Iluka chairman Greg Martin said the cash sale was "counter-cyclical".
"The transaction is consistent with Iluka’s approach to act in a counter-cyclical manner where appropriate, including via transactions where strategic rationale and financial merit can be demonstrated. It is a logical combination of complementary businesses at this point in the mineral sands cycle," he said.
“The acquisition of Sierra Rutile along with current Iluka project progress provides the potential for enhanced portfolio flexibility, which will in turn determine the level and phasing of Iluka’s future capital expenditure."
Sierra Rutile CEO John Sisay said the deal would see further development of his company’s holdings.
"I believe the acquisition of Sierra Rutile by Iluka will ensure the operations in Sierra Leone will be realised to their fullest potential," he said.
In the September quarter, Sierra Rutile produced 43,081 tonnes of rutile, up 24% from the previous period.