Freeport under fire for $9-billion energy deal

Dec 06, 2012 | 04:33 PM | Samuel Frizell

Tags  Freeport-McMoRan Copper & Gold, Plains Exploration & Production, McMoRan Exploration, copper, natural gas, Daniel Rohr, Morningstar, Evy Hambro BlackRock

NEW YORK — Freeport-McMoRan Copper & Gold Inc.’s share price logged a double-digit decline Wednesday after the company announced its $9-billion push into the energy business, with analysts criticizing the move as an unhappy marriage between two incompatible industries.

"I don’t see any reason why these two disparate sets of assets need to be together," Daniel Rohr, an analyst at Chicago-based Morningstar Inc., told AMM. "There’s nothing complementary here."

Freeport on Wednesday announced definitive plans to acquire oil and gas producer Plains Exploration & Production Co. for $6.9 billion in cash and stock, as well as oil and gas producer McMoRan Exploration for $3.4 billion in cash, or $2.1 billion net after taking into account the copper and gold miner’s and Plains Exploration’s existing stakes in the business. Included in the deal are Plain Exploration’s oil and gas assets in the Gulf of Mexico, onshore production at Eagle Ford in Texas and Haynesville, La.; and oil production facilities in California (, Dec. 5). ....

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