Molycorp to acquire rare earth processor Neo Material Technologies in CDN $1.3 billion deal
March 13, 2012
Molycorp, Inc. and Neo Material Technologies Inc. have announced the signing of a definitive agreement under which Molycorp will acquire Neo Materials for approximately CDN $1.3 billion.
“This transaction will link two unique companies – one with a world-class, high-quality resource, and the other with world-class rare earth product design and processing capabilities,” said Mark A. Smith, Molycorp’s President and Chief Executive Officer. “Neo Materials is recognized throughout the industry for its exceptionally high-quality production and processing capabilities, its patented technology platform, and its ability to consistently meet demanding customer specifications. With this combination, Molycorp will be in a unique position to enhance our time to market and provide new global customer segments with rare earth metals, oxides, and alloy powders that are unmatched today. We see significant opportunities for growth as well as powerful synergies through this transaction.”
The combination of Molycorp and Neo Materials will expand Molycorp’s geographic footprint across 11 countries and provide leading product development, research, and sales capabilities. Additionally, Molycorp will gain cutting-edge technologies and will leverage Neo Materials’ years of processing experience and knowledge, to better service the Company’s customer base as well as new customer segments. This transaction brings to Molycorp Neo’s direct operating and sales channels in China, the world’s largest and fastest growing rare earth consuming nation. In 2010 and 2011, Neo Materials’ sales to China and Japan, collectively, accounted for approximately 68% and 64% of sales, respectively.
The combination will expand Molycorp’s technology portfolio to include production of magnetic powders, and rare metals including gallium, indium and rhenium, as well as zirconium oxide. This will enable Molycorp to produce and market materials that are integral to a wide variety of strategic technologies, including advanced electronics, thin film photovoltaics, LEDs, flat screens, super alloys, catalytic converters, mobile and smart phones, magnets, batteries. The addition of Neo Materials’ expertise also will provide entry for Molycorp into customer segments requiring value added, rare earth and rare metal production capabilities – up to 99.99999% purity for some elements.
“The industrial logic of this combination is highly compelling,” said Constantine Karayannopoulos, President and Chief Executive Officer, Neo Materials. “We will be vertically integrating the world’s best rare earth resource outside of China with the world’s best rare earth processing technology company. The new enterprise will have the broadest global coverage in the industry, as well as a strategic position in high-value magnetic materials and rare and other strategic metals. We look forward to this transaction and believe our employees, partners, shareholders, and customers around the world will benefit greatly as a result.”
Smith added, “The combination of our businesses enhances our Mine-to-Magnets vision and places Molycorp in all steps of the vertical rare earth supply chain, reaching many new consumer segments across the globe. It also allows us to reach new and highly specialized niche segments that require value added, specialty products, given Neo Materials’ downstream high value added materials for rare earth applications – a key differentiator and rationale behind this transaction. We continue to place a high value on the expertise, dedication, and commitment to excellence that Neo Materials’ people will bring to our company, and I look forward to a rapid and seamless integration of our organizations.”
Edited by: Paul Whittaker, Editor ipmd.net, [email protected]
News | Articles | Market reviews | Search directory | Subscribe to e-newsletter