Aluminum Corporation of China to Acquire 60% of SouthGobi Resources for $926m and Kick-Start Diversification - Deal Analysis.from GlobalData

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Aluminum Corporation of China to Acquire 60% of SouthGobi Resources for $926m and Kick-Start Diversification - Deal Analysis.from GlobalData Powered By Docstoc
					           Aluminum Corporation of China to Acquire 60% of SouthGobi
             Resources for $926m and Kick-Start Diversification - Deal
                            Analysis from GlobalData
       Reference Code: GDMM0006M&A                                                                                                                               Publication Date: April 2012


       1         Table of Contents
       1 Table of Contents.................................................................1                1.1       List of Tables
        1.1 List of Tables .................................................................1
        1.2 List of Figures ................................................................1               Table 1:       Mongolian Coal Industry, Coal Deals, 2010-2012 ... 4
       2 Aluminum Corporation of China to Acquire SouthGobi                                                 Table 2:       Deal Companies....................................................... 4
         Resources ............................................................................2            Table 3:       Financials of the Deal............................................... 4
        2.1 Deal Overview ...............................................................2                  Table 4:       SouthGobi Resources Ltd – Share Price Information
        2.2 The Deal in Brief............................................................2                                 ................................................................................. 5
       3 CHALCO’s Extension of Business Activity – Steps into Coal                                          Table 5:       SouthGobi Resources Ltd – Financial Information
         Mining ..................................................................................2                        (Trailing Twelve Months Ended September 30, 2011)
        3.1 Diversification for CHALCO ...........................................2                                        ................................................................................. 5
        3.2 CHALCO – Shareholding Structure ...............................3                                Table 6:       Financial Advisors .................................................... 5
        3.3 Deal Benefits both CHALCO and Ivanhoe Mines Ltd. ...3                                           Table 7:       Company Valuation Multiples ................................... 5
        3.4 The Terms of the Deal ...................................................3                      Table 8:       Acquirer Information ................................................. 5
        3.5 Brief Overview of Target Company ...............................3                               Table 9:       Vendor Information................................................... 6
        3.6 Mongolian Coal Deals – Huge Proven High Grade Coal
             Reserves .......................................................................4
        3.7 Deal Valuation and Other Details ..................................4
        3.8 Deal Rationale ...............................................................5                 1.2       List of Figures
       4 Appendix ..............................................................................6           Figure 1: Shareholding Structure of CHALCO as of December
        4.1 Abbreviations.................................................................6                           31, 2010 ................................................................... 3
        4.2 GlobalData’s Methodology ............................................6                          Figure 2: SouthGobi Resources’ Location of Active Projects .. 3
        4.3 Contact Us.....................................................................7                Figure 3: Shareholding Structure of SouthGobi as of March,
        4.4 Disclaimer......................................................................7                         2012 ......................................................................... 4
       i




                                                                                                                                                  GDMM0006M&A /Published APR 2012
Aluminum Corporation of China to Acquire 60% of SouthGobi                                                                                                                           Page 1
Resources for $926m and Kick-Start Diversification                                                    © GlobalData. This report is a licensed product and is not to be copied, reproduced,
                                                                                                                                                              shared or resold in any form
                                                                              Ivanhoe intends to use proceeds from the transaction primarily
                                                                              to fund the continued development of its flagship copper, gold
       2        Aluminum Corporation of China to                              and silver mine in southern Mongolia, Oyu Tolgoi.
                Acquire SouthGobi Resources
                                                                              "Ivanhoe's board, in conjunction with our financial and legal
       2.1      Deal Overview                                                 advisors, has determined that the value offered by this
                                                                              transaction is an excellent opportunity for our shareholders to
       Acquirer          :        Aluminum Corporation of China Ltd.          realize significant value through our creation of what has
                                  (CHALCO)                                    become one of the fastest growing coal producers on China's
       Target            :        SouthGobi Resources Ltd.                    doorstep," said Ivanhoe chairman David Huberman.

       Deal Type         :        Majority Acquisition                        The transaction is subject to all statutory and regulatory
                                                                              approvals, including Investment Canada Act and Competition
       Deal Status       :        Planned                                     Act approvals, as well as Chinese regulatory approvals and
       Date Announced :     
				
DOCUMENT INFO
Description: Aluminum Corporation of China Ltd., a subsidiary of Chinalco Aluminum Corporation of China (CHALCO), an aluminum exploration company, intends to make a proportional takeover bid to acquire all issued and outstanding shares of SouthGobi Resources Ltd., a coal production and development company from Ivanhoe Mines, a mining company.
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