8-KOther EventsExhibits & Filings

FREEPORT-MCMORAN INC 8-K Report, Corporate Update (Dec 5, 2012)

Filed December 5, 2012For Securities:FCX

Summary

Freeport-McMoRan Copper & Gold Inc. (FCX) announced on December 5, 2012, that it has entered into definitive merger agreements to acquire Plains Exploration & Production Company (PXP) and McMoRan Exploration Company (MMR). The proposed acquisitions represent a significant strategic expansion for FCX, diversifying its operations beyond copper and gold into oil and gas. The PXP acquisition is valued at approximately $6.9 billion in cash and stock, while the MMR acquisition is valued at approximately $3.4 billion in cash (or $2.1 billion after accounting for FCX and PXP's existing ownership in MMR). The MMR transaction also includes a distribution of units in a royalty trust holding a 5% overriding royalty interest on future hydrocarbon production from MMR's Gulf of Mexico properties.

Key Highlights

  • 1FCX to acquire Plains Exploration & Production Company (PXP) for $6.9 billion in cash and stock.
  • 2FCX to acquire McMoRan Exploration Company (MMR) for $3.4 billion in cash (effectively $2.1 billion net of existing ownership).
  • 3The acquisitions mark a significant diversification for FCX into the oil and gas sector.
  • 4MMR shareholders will receive a distribution of units in a royalty trust holding a 5% overriding royalty interest on future hydrocarbon production.
  • 5Transactions are subject to customary closing conditions and regulatory approvals.
  • 6FCX anticipates filing registration statements (Form S-4) and proxy statements/prospectuses for both transactions.

Frequently Asked Questions

The primary strategic rationale is to significantly diversify Freeport-McMoRan's operations and revenue base into the oil and gas sector, complementing its existing copper and gold businesses.

The acquisition of PXP is valued at approximately $6.9 billion, and the acquisition of MMR is valued at approximately $3.4 billion (or $2.1 billion net of existing ownership).

The acquisition of MMR involves a cash payment to MMR shareholders and a distribution of units in a royalty trust. This trust will hold a 5% overriding royalty interest on future hydrocarbon production from MMR's existing shallow water Gulf of Mexico properties.

Both transactions are subject to the satisfaction of customary closing conditions, including regulatory approvals and shareholder approvals. FCX will be filing registration statements (Form S-4) and related proxy materials with the SEC for both proposed mergers.