Nowadays it seems that everyone wants a piece of the former Phelps Dodge Corp., an IW 50 Best Manufacturer for 2007 now operating as the Phelps Dodge Mining Co. under its parent company Freeport-McMoRan Copper & Gold Inc.
Freeport-McMoRan, which acquired Phelps Dodge in March, said on Sept. 12 that it had sold its international wire and cable business, Phelps Dodge International Corp., to General Cable Corp. for $735 million. Freeport-McMoRan said it plans to use the net proceeds, approximately $620 million, to repay debt.
"The transaction will provide FCX (Freeport-McMoRan) with significant cash proceeds and is consistent with our strategy to focus our resources on the exciting opportunities that exist in our mining operations and development projects in the Americas, Indonesia and Africa," said Freeport-McMoRan CEO Richard Adkerson in a Sept. 12 statement.
Freeport-McMoRan first announced its agreement to purchase Phelps Dodge on Nov. 19, 2006. Prior to the buyout, Phelps Dodge had posted a fourth-quarter profit of $1.32 billion, or $6.50 a share, compared with $121.3 million, or 60 cents a share, during the year-earlier period.
Phelps Dodge traces its roots back to 1834 in New York City where it traded U.S. products to England in exchange for copper, iron, tin and other metals. The company was named after its founders Anson Phelps and his son-in-law William Dodge.
The company began mining operations in 1881 when it invested in a share of the Detroit Copper Mining Co. in Morenci, Ariz. The company continued to grow before expanding internationally in 1984 when it acquired a mine in Chile. Phelps Dodge grew to become an $11.9 billion operation before the November buyout was announced.
| At A Glance Phelps Dodge Corp. Phoenix, Ariz. Primary Industry: Primary Metals Number of Employees: 15,000 2006 In Review Revenue: $11.9 billion Profit Margin: 25.34% Inventory Turnover: 16.74 Revenue Growth: 43.72% Return On Assets: 29.13% Return On Equity: 53.87% |
The merger of the two companies created the world's second-largest copper company, according to Bloomberg news service. The deal was viewed as an opportunity for the companies to combine their resources for expanded development and growth.
Prior to the buyout, Phelps Dodge had begun an $850 million expansion of its Cerro Verde mine in Peru. It's also in the process of developing a mine in Safford, Ariz., for $550 million. Production at the Safford mine is slated for 2008. Freeport McMoRan also is leveraging Phelps Dodge's mining and processing technology to optimize metal production at its Grasberg mine in Papua, Indonesia.
"Together, FCX and Phelps Dodge will have the size, management depth and financial strength to optimize existing operations and accelerate our growth by aggressively pursuing promising new development projects, exploration and acquisitions," Adkerson said when the deal was announced.
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