Anglo American exchanges copper for diamonds

Just a day after I reported on the takeover wave in the resource
sector is to keep it that already: The largest Japanese commodities
trader, Mitsubishi, has secured with a billion-deal 24.5% of Chile's
copper activities of Anglo American.

The deal is expected for the acquisition sensor. Actually, the
majority owner, Codelco has favored an option on the Anglo American
subsidiary and became a buyer. To date the option was not taken and
Anglo American sees it as a right that half the 49% stake is sold to
the Japanese.

Codelco is now considering whether legal action is possible against
the sale. However, this is unlikely. Buyers and sellers have
previously scrutinized least, if the deal is legally defensible. With
$ 5.4 billion takeover price, a deal is not completed "good luck".
Two deals in 6 days

The sale will be welcomed by the Anglo-American shareholders. The
stock of British-South African commodity group increases on the London
stock exchange market in an almost unchanged at 4%.

Anglo American has taken only six days ago for $ 5.1 billion to
control the diamond dealer De Beers. With the acquisition of this
stake to Mitsubishi, the fund is replenished again.

The deal is good for diamonds, copper. Anglo American, De Beers may by
rule and meets half of its minority stake from a fair price. It is
quite possible that in the coming weeks, the remaining 24.5% will be
sold.
Purchase price is higher than expected

The purchase price of $ 5.4 billion Chile evaluated the activity with
a total of 22 billion dollars. Compared with other acquisitions in the
copper industry, a hefty price. In the copper industry paid in the
past 12 months on average acquisition multiples (EBITDA) of 13.2, 17.4
Mitsubishi pays.

That should not be last one of the reasons why the Anglo-American
shareholders today in celebration mood. It was expected that Anglo
American receives for the 49% share of under 10 billion dollars.

To make sweeping statements that Mitsubishi has paid too much, but
would be wrong. Play in the commodity sector in the evaluation of
acquisition candidates whatever the resource stocks will play an
important role.
Acquisition can pay off quickly

The Mitsubishi-entry into Chile is understandable. The commodities
trader secures a stake in the lucrative Los Bronces mine, which may
soon become the fifth largest copper mine in the world. With the
acquisition of Japanese copper production rises to almost double.

Commodity experts expect the price of copper will rise in coming years
to 12,000 dollars (currently around $ 8,000), because significant
copper discoveries are increasingly rare.

China in particular will continue to operate as an important fuel the
demand and price. The country has begun to expand the infrastructure
in rural areas and needs copper for power and telephone lines.
Mitsubishi for an ideal scenario.