Freeport-McMoRan Copper & Gold Inc. made a major move into oil and gas exploration and production on December 5 by agreeing to acquire Plains Exploration & Production Company and McMoRan Exploration Co. for a total of $8.9 billion in cash and stock. Freeport-McMoRan will also assume $11 billion in debt in the two deals.
Freeport-McMoRan, already the world’s largest publicly traded copper company, will pay $6.8 billion for Plains, half in cash and half in stock. At $50 per Plains share, the deal came at a 39 percent premium to the target’s closing price on December 4. Plains has aggressively snapped up oil and gas properties in recent years and last fall paid BP p.l.c. $5.55 billion for oil and gas assets in the Gulf of Mexico [Deals & Suits, February].
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