Rare-Earth Bust Prompts Molycorp's Biggest Bet With Neo Material: Real M&A

Molycorp Inc. (MCP), after losing two- thirds of its value in 10 months as demand for rare-earth metals imploded, is now seeking to boost shareholder returns with its biggest takeover yet.

The owner of the largest rare-earth deposit outside China yesterday agreed to buy Neo Material Technologies Inc. for C$1.3 billion ($1.3 billion) in cash and stock. At 4.7 times earnings before interest, taxes, depreciation and amortization, the deal is the cheapest by a diversified metals producer on record, according to data compiled by Bloomberg. Molycorp’s stock rallied by the most on record after the announcement.

Molycorp Prices $650 million of Senior Secured Notes

1. (AP) — To get a bird's-eye view of the proposed rare earth elements mine, drive north of Sundance on Highway 14, turn east on Warren Peak Road and head to the Black Hills. Snow prohibits travel to the site, but you can climb up the lookout tower on
2. Through its joint venture with Daido Steel and Mitsubishi Corporation, Molycorp expects to begin manufacturing next-generation, sintered neodymium-iron-boron (NdFeB) permanent rare earth magnets in 2013. The rare earths and rare metals that Molycorp
3. (AP) — To get a bird's-eye view of the proposed rare earth elements mine, drive north of Sundance on Highway 14, turn east on Warren Peak Road and head to the Black Hills. Snow prohibits travel to the site, but you can climb up the lookout tower on
4. The price of neodymium will stay above the historical range, because high-quality REE magnets are in demand for a number of industries, but prices are likely going to be nothing like where they are trading today. We forecast $80/kilogram (kg) for
5. Rare earth materials include metals, oxides, alloys and magnets that are used in applications ranging from entertainment technologies to defense weapons to clean alternative energy. Examples include terbium, neodymium, yttrium, scandium and gadolinium.