The REE Game Changer: Molycorp Acquires Neo Materials for CDN$1.3 Billion

Neo MaterialsJust in, another rare earth game changer: Molycorp Acquires Neo Materials. This puts Molycorp ahead in the race in that it gives them additional cash flow and strategically repositions them on a global basis. Giving them operating facilities in Europe, Asia and North America: this will make Molycorp a global presence.

Molycorp Inc. (NYSE: MCP) has acquired Neo Material Technologies Inc. (TSX: NEM) in a deal valued at approximately CDN$1.3 billion. This transaction will create a global, vertically integrated rare earth technology leader and will give Molycorp a greater range of products and greater sales opportunities in Asia.

What else will this 'great' deal achieve in addition to making NEM shareholders very happy?

  • It will give Molycorp greater exposure to the world’s largest consumer of rare earths — China.
  • It leverages Neo Material’s existing infrastructure and will allow Molycorp to increase its overall production once the Project Phoenix Phase 2 productions starts in 2013.
  • It expands Molycorp’s production capabilities to include Neo Material’s Magnequench patented magnet powder products, which are used to produce neodymium-iron-boron magnets.
  • It expands Molycorp’s rare earth portfolio to include gallium, rhenium and indium, which are all used in electronics, solar cells, aerospace and lighting.

Neo Material's shareholders will receive consideration equal to CDN$11.30 per share of which CDN$8.05 per share is in cash and 0.122 Molycorp shares based on Molycorp's 20-day volume weighted price per share of US$26.66.

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The CDN$11.30 reflects a premium of about 42% on Neo Material's closing share price of CDN$7.97 on March 8th.

[Photo: Constantine E. Karayannopoulos has been the Chief Executive Officer and the President of Neo Material Technologies Inc. since August 31, 2005 and the above photograph was of his keynote presentation at the Technology Metals Summit February 1st in Toronto. This presentation may be accessed on]

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Tracy Weslosky

About Tracy Weslosky

Tracy Weslosky is the Publisher and Editor-in-Chief of InvestorIntel, a leading global investment intelligence source created for the innovative and entrepreneurial minded that represents over 50 publicly listed companies globally that are listed on Tracy is also the Founder & CEO for ProEdge Media Corp., an online publishing and media production company since 2001; and is the Managing Partner for 724 Capital Corp., a business consulting firm that currently represents U.S. Rare Earths, Inc. Previously she has owned a boutique Investment Banking firm for 7 years that was the basis for a business reality television series called, DealFlow. Aired around the world for 3 years on CNBC World, WealthTV and many other networks globally; Tracy is a speaker, writer and an entrepreneur.
  1. Judging from the impact the deal had on the two company’s SP, you’d think NEO acquired MCP whose stock is still barely above its alltime low.

  2. You may be thinking of MCP’s recent (52 week) low of 23.05. MCP hit its all time low of 12.10 on the day it came public at 14.00, on July 29, 2010.

  3. I hold shares in NEO Materials, but not MCP. This announcement is a real surprise. The REE space is getting very interesting again. Hopefully this will reignite interest in the whole space again.

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