SOURCE: MMX

January 17, 2008 10:23 ET

Eike Batista and Anglo American Entered Into Exclusive Discussions

RIO DE JANEIRO, BRAZIL--(Marketwire - January 17, 2008) - MMX Mineração e Metálicos S.A. ("MMX" or the "Company") (BOVESPA: MMXM3) (TSX: XMM), pursuant to article 157 of Law 6404/76, and CVM Instruction No. 358/02, hereby makes the following announcement:

MMX is pleased to announce that a wholly owned subsidiary of Anglo American plc ("Anglo American") and Mr. Eike Batista have entered into a period of exclusive discussions in relation to the acquisition (the "Acquisition Transaction") by Anglo American of Mr. Batista's shares in a new company to be formed ("Newco") in connection with a proposed spin-off of certain assets and liabilities of MMX to Newco and LLX Logística S.A. ("LLX"), with the balance of assets and liabilities remaining in MMX (the "Reorganization Transaction"). It is proposed that the Reorganization Transaction will be a condition to the completion of the Acquisition Transaction. The terms of the Acquisition Transaction will also include the payment by Newco to MMX of an ongoing royalty, commencing in 2023 for MMX Amapá and 2025 for MMX Minas-Rio, as well as other mutual commitments of the parties.

Upon completion of the Reorganization Transaction, Newco will hold MMX's current 51% interest in the MMX Minas-Rio System (excluding the 51% interest in LLX Minas-Rio currently held by LLX) and MMX's current 70% interest in the MMX Amapá System. Upon completion of the Acquisition Transaction, Anglo American will pay a price of approximately US$361.12 per Newco share (assuming one Newco share for each current MMX share) or US$5.5 billion for 100% of the issued and outstanding shares. A wholly owned subsidiary of Anglo American already holds a 49% interest in the MMX Minas-Rio System and in LLX Minas-Rio. After the Reorganization Transaction, MMX will continue to be Mr. Batista's exclusive vehicle for mining projects generally and LLX for ports and inbound logistics, in each case for as long as Mr. Batista controls such entities. As part of the Reorganization Transaction, MMX would also have an option to own 50% of the first pellet plant to be built on the Açu Port.

In connection with the Reorganization Transaction, each of Newco and LLX will be listed on the Novo Mercado and shareholders of MMX will be entitled to hold shares in each of the three companies, receiving one share in the capital of Newco and LLX for every MMX share held. In addition, each global depositary receipt of MMX will represent 1/20th of a share of each of MMX, LLX and Newco.

Closing of each of the Reorganization Transaction and the Acquisition Transaction will be subject to a number of terms and conditions, including board and regulatory approval and the negotiation of definitive transaction documents. In addition, each of Newco, LLX and MMX will be required to obtain securityholder approval for the completion of the Reorganization Transaction.

After consummation of the Acquisition Transaction, Anglo American will launch a tag-along offer to the minority shareholders of Newco for the same price offered to Mr. Batista, all in accordance with Brazilian law and the rules of the Novo Mercado.

Eike Batista, Chairman and CEO of MMX, said: "I strongly welcome Anglo American's globally renowned capabilities in developing and operating assets of this size and I look forward to a productive ongoing relationship as Chairman of the project boards of the Minas-Rio and Amapá projects as they reach their full potential. Our experience of working with Anglo American has reinforced my view that Anglo American's world class expertise and its approach to environmental and social responsibility issues positions it well to own and operate these important assets in Brazil."

Cynthia Carroll, CEO of Anglo American, said: "I am delighted that Mr. Batista has agreed to Anglo American's proposed price for his shares in Newco and that we are now in exclusive talks to acquire the Minas-Rio and Amapá iron ore projects. These two projects are a great strategic fit for Anglo American. Our experience of working on the Minas-Rio project since last year has been excellent and we are pleased to be developing such an exciting iron ore project in Brazil. Anglo American will continue to evaluate the substantial expansion potential of these projects, particularly given the extremely positive long term prospects for the iron ore industry."

Further announcements will be made in due course upon execution of the definitive transaction documents.

Credit Suisse is acting as exclusive financial advisor to MMX and has been designated by MMX to opine on the fairness of this transaction to MMX shareholders. Banco ItaúBBA is acting as extraordinary advisor to the Chairman and Board of Directors.

For more information, please contact ri@mmx.com.br or visit our website at www.mmx.com.br/ri

Contact Information

  • Contact:
    Luiz Rodolfo Landim Machado
    Executive President and Investor Relations Officer
    MMX Mineração e Metálicos S.A.
    Tel. 55 21 2555-5634 / 2555-5558 (português)
    Phone: 55 21 2555-5634 / 2555-5558 (inglês)