The plot for acquisition of bankrupt copper producer Asarco LLC gets thicker. India’s Sterlite Industries may be still interested in acquiring bankrupt copper producer Asarco LLC, albeit at a lower valuation. However, Asarco’s parent company Grupo Mexico, which was also in a race to acquire the copper miner, has a different opinion about the company. Grupo Mexico’s lawyers has been quoted by a US paper as saying that they would not pay more than $200 million for the company.
While Sterlite Industries’ US subsidiary has said that it has revised it bid for Asarco from an earlier $2.6 billion to $2.1 billion due to the current economic environment.
This is a spectacular fall in valuation from the $2.7 billion bid Grupo Mexico had initially put for the US-based company. Grupo Mexico had dropped its original bid on December 1 last year.
What makes it more interesting is that a third party has also emerged for acquisition of Asarco. Swiss firm Glencore International, one of the largest suppliers of commodities and raw materials in world, is also in talks to acquire Asarco. It had reported revenue of around $1.9 billion for FY07.
Sterlite had announced the acquisition of Asarco on 31st May, 2008 for $2.6 billion. But Grupo Mexico, the current owner, opposed the sale, and in order to block it put a counterbid at $2.7 billion. But with the global economic slowdown and fall in copper prices by over 60%
both the companies pulled back their initial bids.
Sterlite is the Indian arm of London-listed mining major Vedanta Resources Plc. Grupo Mexico had put Asarco into bankruptcy in 2005 after the company faced lawsuits for environmental issues.