Australian uranium producer Paladin Energy has agreed to acquire Canada-based Fission Uranium at an implied equity value of C$1.14bn ($835m).
Both parties have entered into a definitive arrangement agreement in this regard. Under this, Fission Uranium’s shareholders will receive 0.1076 fully paid shares of Paladin Energy for each Fission Uranium share held.
The consideration represents an implied value of C$1.3 ($0.95) per Fission Uranium’s share.
The enlarged Paladin Energy will have a pro-forma market capitalisation of about $3.5bn.
Following the closing of the proposed all-stock deal, the existing shareholders of Paladin Energy and Fission Uranium will hold around 76% and 24% of the combined entity, respectively.
Paladin Energy has a 75% ownership in the Langer Heinrich mine located in Namibia.
Fission Uranium, on the other hand, owns the Patterson Lake South uranium property, which is a proposed high-grade uranium mine and mill in the Athabasca Basin region of Canada.
Through the proposed merger, both parties aim to build a clean energy leader and a globally significant uranium company.
The deal will also result in improved project development pipeline and diversified presence across the uranium mining jurisdictions of Canada, Namibia, and Australia.
Besides, the proposed merger will deliver multi-asset production by 2029 to shareholders of both firms.
Paladin Energy CEO Ian Purdy said: “The acquisition of Fission, along with the successful restart of our Langer Heinrich Mine, is another step in our strategy to diversify and grow into a global uranium leader across the top uranium mining jurisdictions of Canada, Namibia and Australia.
“Fission is a natural fit for our portfolio with the shallow high-grade PLS project located in Canada’s Athabasca Basin. The addition of PLS creates a leading Canadian development hub alongside Paladin’s Michelin project, with exploration upside across all Canadian properties.”
Upon the completion of the proposed merger, the shares of Fission Uranium will be de-listed from the Toronto Stock Exchange (TSX), the OTCQX, and the Frankfurt Stock Exchange.
Fission Uranium president and CEO Ross McElroy said: “The combination of Fission and Paladin will create a world class diverse uranium producer, adding a class leading development project in a Tier 1 jurisdiction with the ability to expand production and cash flow profiles in the near term.
“With commercial production at Langer Heinrich and further development milestones at PLS, this opportunity will create a diverse pureplay uranium company with current production and a deep pipeline of near and mid-term assets available to investors.”
Subject to customary conditions and regulatory approvals, the transaction is scheduled to be completed in the September quarter of this year.
For Paladin Energy, Macquarie Capital is serving as financial adviser, Fasken Martineau DuMoulin as Canadian legal adviser, and Corrs Chambers Westgarth as Australian legal adviser.
SCP Resource Finance is acting as financial adviser for Fission Uranium while Blake, Cassels & Graydon is the legal adviser.
