South32 Limited (ASX:S32) agreed to acquire additional 25% stake in Mozal Aluminium from MCA Metals Holding Gmbh for $250 million on September 30, 2021. The transaction is subject to customary adjustments for working capital and net debt. The transaction has an acquisition multiple of 3.6x FY21 EBITDA. Post Completion South32 Limited (ASX:S32) will own 72.1% stake in Mozal Aluminium. The transaction will be funded from cash in hand. The transaction is subject to approval from the Competition Regulatory Authority in Mozambique be satisfied. As of January 24, 2022, the transaction is expected to close in first quarter of 2022. As of February 2, 2022, the transaction is expected to close in the third quarter of 2022. As of March 30, 2022, the transaction is expected to close in mid 2022. The transaction is accretive. South32's current shareholding of Mozal Aluminium is 47.1%, while the Industrial Development Corporation of South Africa (IDC) also holds pro-rata pre-emptive rights based on their 24% shareholding which they have yet to exercise. If the IDC exercises its entire pre-emptive rights South32 would increase our shareholding in Mozal Aluminium to 63.7%, while IDC would increase their shareholding to 32.5%. If the IDC do not exercise its pre-emptive rights, then South32's shareholding in Mozal Aluminium would increase to 72.1%.
Following transaction, South32 Limited's stake increased to 63.7% in Mozal Aluminium.