19 October 1998

South Africa's Anglo American Corp. unveiled a merger with Minorco SA that will create one of the world's biggest mining and natural resources companies with a stock market value of $10 billion. Anglo said the new company—which will have vast holdings in gold, platinum and other metals, as well diamonds and coal—will move its headquarters to London after 81 years in South Africa. The merger is expected to be completed by March. Anglo Plc would be listed and its corporate headquarters established in London by then. The combined company will have annual earnings of $1.4 billion and sales of $16.3 billion.

Under the deal, Minorco stockholders will get one new Anglo Plc share or $16 in cash for every two Minorco shares. Anglo American shareholders will get one new Anglo Plc share for each share. A committee of independent Minorco directors intends to recommend that shareholders accept the offer. Anglo Plc's main shareholders will be diamond giant De Beers and the Oppenheimer family, who have agreed to support the merger and accept the offer to Minorco shareholders. De Beers expects to hold around 40% of Anglo Plc.

Anglo said it would dispose of its interests in South Africa's Beverage and Consumer Industries Holdings Ltd. and South African Breweries, the world's fourth-largest brewer.

Minorco will sell its gold interests, mainly in North and South America, and its stakes in fertilizer maker Terra Industries, as well as its 31.8% stake in Engelhard Corporation, the US based provider of emission control catalysts and other specialty chemicals.

Engelhard announced that, in view of the Minorco's announcement, Engelhard has retained Lazard Freres & Co. and J.P. Morgan & Co. Inc. as its financial advisors to explore the company's strategic alternatives.