NEW YORK (AP) -- Asarco Inc., the nation's third-largest copper producer, signed a contract Monday to be acquired by Grupo Mexico S.A. de C.V. for $1.24 billion in cash.
The deal, which was announced Oct. 15, officially severs Asarco's agreement to be purchased by Phelps Dodge Corp. Asarco will pay a $30 million breakup fee to Phelps Dodge.Shareholders of New York-based Asarco will receive $29.75 for each share they own. Grupo Mexico raised their offer earlier this month to top a rival bid from Phelps Dodge.
Phoenix-based Phelps Dodge, the world's largest copper producer, said it was unwilling to overpay for Asarco and would let its tender offer for Asarco shares expire at midnight Monday.
"We believe our shareholders will understand and appreciate the financial discipline behind our decision," Douglas C. Yearley, chairman and chief executive officer of Phelps Dodge, said in a statement.
With the addition of Asarco's 1 billion pounds of annual copper production, Grupo Mexico will become the world's third-largest copper company.