Pan American Silver (TSX, NYSE: PAAS) agreed to buy MAG Silver (TSX, NYSE: MAG) for about $2.1 billion in cash and stock to gain a stake in Mexico’s large-scale Juanicipio mine. MAG shares jumped while Pan American’s plunged.
MAG shareholders will receive the equivalent of $20.54 per share, based on Friday’s closing price on the New York Stock Exchange, according to a release on Monday. The deal, which calls for Vancouver-based Pan American to pay $500 million in cash and 0.755 share for each share of MAG, is expected to close in the second half of the year. Pan American expects to issue about 60 million shares to MAG shareholders at closing.
Adding MAG will let Pan American – the operator of 10 mines in seven countries – boost its revenue and give it a chance to benefit from ongoing exploration efforts in Mexico. Juanicipio, which is 44% owned by MAG, generated free cash flow of $77.4 million…
