The Big Nickel is now an American one, and the deal is no small change.
Sudbury, Ont.’s Inco Ltd. mining company, one of the world’s largest nickel producers and the inspiration for the city’s larger-than-life five-cent piece, is now in the hands of Phoenix, Arizona based copper giant Phelps Dodge Corp.
Phelps Dodge is buying Inco and fellow Canadian mining corporation Falconbridge Ltd. in a deal worth $40 billion US. The merger would create the world’s largest nickel producer and second largest copper producer.
The new company will reportedly be called Phelps Dodge Inco and its $56 billion US-worth “will vault (it) to super-major status within the global mining industry” said Phelps Dodge company chairman and CEO Steven Whisler.
The mining giant would employ 40,000 people in 40 countries, and would be based in the current American headquarters of Phelps Dodge. The company’s nickel division would be based in Toronto, and American owners promise no negative impact on Canadian operations.
Before the latest deal was struck, Inco and Falconbridge had planned to merge.
The new company would be owned 40 per cent by Phelps Dodge shareholders, 31 per cent by current Inco shareholders, and 29 per cent by Falconbridge shareholders.
Inco chairman and CEO Scott Hand said the friendly deal “delivers an excellent value proposition for our shareholders” and insisted the company would remain strongly committed to Canada. The company has vowed not to lay off anyone in Canada for at least three years. It admitted there would be some restructuring and job losses in head-office.
Whisler, 51, will become chairman and CEO of the mining giant, while Hand, 64, will become vice-chairman. Falconbridge CEO Derek Pannell, 60, will reportedly be president.