Molycorp to Acquire Leading Rare Earth Processor Neo Material Technologies in $1.3 Billion Deal

2012-03-09

Molycorp to Acquire Leading Rare Earth Processor Neo Material Technologies in $1.3 Billion Deal

March 8, 2012 (Source: Businesswire) --

    Transaction Will Create Global, Vertically Integrated Rare Earth Technology Leader and Give Molycorp a Greater Range of Products and Increased Sales Opportunities Across Asia

TRANSACTION HIGHLIGHTS

  • The transaction will combine Molycorp’s world-class rare earth resource and low-cost production from its Project Phoenix with Neo’s proven leadership in the development, processing, and distribution of technically advanced rare earth products.
  • The transaction will give Molycorp greater exposure to the world’s largest and fastest-growing rare earth consuming nation – China – which now comprises about 70% of global rare earth consumption.
  • The transaction leverages Neo Materials’ existing infrastructure to allow Molycorp to ramp up its overall production once Project Phoenix Phase 2 production begins in 2013.
  • The transaction expands Molycorp’s production capabilities to include Neo Materials’ Magnequench patented magnet powder portfolio used to produce neodymium-iron-boron (NdFeB) bonded rare earth magnets.
  • The transaction expands Molycorp’s strategic rare metals portfolio to include gallium, rhenium, and indium, which are used in advanced electronics, photovoltaic, aerospace, catalytic converters, and lighting industries.
  • The combination is expected to be accretive to Molycorp’s 2012 earnings and cash flow. Significant identified synergies are expected to further strengthen the financial performance of Molycorp beyond 2012.

   Molycorp, Inc. (NYSE: MCP) (“Molycorp”) and Neo Material Technologies Inc. (TSX:NEM) (“Neo Materials” or “Neo”) today announced the signing of a definitive agreement under which Molycorp will acquire Neo Materials for approximately CDN $1.3 billion. This will create one of the most technologically advanced, vertically integrated rare earth companies in the world.

    This transaction will link two unique companies – one with a world-class, high-quality resource, and the other with world-class rare earth product design and processing capabilities,” said Mark A. Smith, Molycorp’s President and Chief Executive Officer. “Neo Materials is recognized throughout the industry for its exceptionally high-quality production and processing capabilities, its patented technology platform, and its ability to consistently meet demanding customer specifications. With this combination, Molycorp will be in a unique position to enhance our time to market and provide new global customer segments with rare earth metals, oxides, and alloy powders that are unmatched today. We see significant opportunities for growth as well as powerful synergies through this transaction.”

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