South Africa company to buy Stillwater Mining Co. for $2.2B
BILLINGS, Mont. (AP) - The company that owns Montana's largest mining complex announced Friday that it will be acquired by a South African company for $2.2 billion in a deal that requires U.S. government approval.
Sibanye Gold Limited will buy Littleton, Colorado-based Stillwater Mining Company under a merger agreement expected to close in the second quarter of 2017, said Stillwater Chief Executive Officer Mick McMullen.
Sibanye (sih-BAHN'-yay) also will assume $500 million of Stillwater's debt.
Stillwater is the only U.S. producer of platinum and palladium, precious metals used in catalytic converters to reduce pollution from cars and tracks, and as jewelry. It employs more than 1,400 people at two mines in southern Montana's Beartooth Mountains and at a smelter and refinery in the small Montana town of Columbus.
As precious metals prices dropped in recent years, the company cut its workforce significantly, including about 120 workers from the Stillwater Mine and the Columbus facility. With prices rising for palladium, most of those workers have since been rehired and McMullen said he does not anticipate further job losses stemming Friday's announcement.
"It's business as usual," McMullen told The Associated Press in a telephone interview. "These guys (Sibanye) have bought into a company that's not a turnaround story. This thing is running itself."
A U.S. subsidiary of Sibanye will pay $18 per share in cash in the acquisition, Stillwater said. Sibanye also will take on some of Stillwater's debt.
Stillwater's pending plans to expand operations with two mining projects located near its existing mines and known as Blitz and Lower East Boulder will continue.
The deal was approved unanimously by Stillwater's board of directors, of which former Montana Gov. Brian Schweitzer is chairman. The two-term governor and other board members will resign when the deal closes.
Scott McGinnis with United Steelworkers Local 11-0001, the union for much of the company's workforce, said miners had no further information about the impact of the deal but will meet with Sibanye representatives on Monday.
The acquisition must be approved by the two companies' shareholders and the Committee on Foreign Investment in the United States, an inter-agency committee that reviews takeovers of U.S. businesses by foreign entities.
Stillwater also owns copper deposits in Ontario, Canada, and in Argentina.
Shares of Stillwater (SWC) rose sharply on the news, closing at $17.32 a share on the New York Stock Exchange, an increase of almost 18 percent.
American depository shares of Sibanye plunged to $7.10 on the NYSE, a drop of more than 15 percent.
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