Australian iron ore miner Atlas Iron Limited has announced an approximate AU$828 million (US$826 million) off-market takeover bid for a 100 percent stake in iron ore mining company Giralia Resources Limited which also operates in Australia's Pilbara region.
The offer has been recommended by the board of Giralia, with the merger of the two Pilbara mining companies to create a group worth AU$2.5 billion ($2.49 billion).
"The two companies have deposits that either join or are very close to each other at Mt Webber, McPhee Creek, Beebyn Range and Western Creek. This merger is a great way to grow production, reduce operating costs, maximize cash flows and deliver significant value for all shareholders," Atlas' managing director David Flanagan commented.
By acquiring Giralia, Atlas will be able to increase its measured, indicated and inferred resources to 602.3 million mt from 204.7 million mt now.
Atlas said that its offer will start on January 11, 2011 and be valid for a month with an acceptance condition of 90 percent.