Bloomberg News

Vale to Buy Caemi's Remaining Shares for $1.46 Bln

January 23, 2006

Cia. Vale do Rio Doce, the world's largest iron-ore producer, agreed to buy the shares it doesn't already own of Caemi Mineracao e Metalurgia SA in a stock trade valued at about 3.29 billion reais ($1.46 billion).

Vale already controls Caemi, with a stake of about 60 percent of outstanding total capital, the Rio De Janeiro-based company said today in a statement distributed by PR Newswire.

Vale will pay 0.04115 preferred share for each share of Caemi preferred stock it doesn't own, the company said. Vale owns all of Caemi's common stock and 40 percent of non-voting preferred shares, its most-traded class of stock.

The purchase of Caemi is part of Chief Executive Roger Agnelli's plan to make Vale one of the world's largest mining companies. The acquisition of companies such as Caemi has made Vale's structure complex -- it has more than 5 dozen subsidiaries -- helping keep its cost of capital higher than that of rivals such as Australia's BHP Billiton Plc.

In November 2005, Vale bought 93 percent of Vancouver-based nickel miner Canico Resource Corp. for C$876 million ($749 million) in cash. Agnelli said last September that Vale planned to invest $1.1 billion in Canico's Onca Puma property in Brazil and start the mine in 2008.

Vale's preferred shares fell 47 centavos to 93.03 reais in Brazil. Caemi's preferred stock lost 1 centavo to 3.85 reais.

To contact the reporter on this story: Danny King in San Francisco at; Jeb Blount in Rio de Janeiro at

To contact the editor responsible for this story: Dan Reichl at

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