Freeport-McMoRan: Sell-Off Is Justified; Acquisitions Have Little Strategic Rationale

Shares of Freeport-McMoRan Copper & Gold (FCX) lost 16% in Wednesday's trading session. Freeport will acquire Plains Exploration & Production (PXP) for $6.9 billion and acquire McMoRan Exploration (MMR) for another $3.4 billion.

The Deal

Freeport-McMoRan announced two large acquisitions on Wednesday for a total equity value of roughly $10.3 billion. Including the assumption of debt, Freeport will pay $20 billion for both companies.

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