Boliden to buy Nexa Resources for $1.3 billion in shares

Sweden’s Boliden has agreed to acquire the controlling stake in Brazilian mining firm Nexa Resources for $1.3 billion in shares. The transaction will give the European producer a significant zinc and silver platform in Latin America. Boliden will purchase Votorantim’s 65 per cent holding by issuing 0.25 of its own shares for each Nexa share. This implies a price of $15.29 per Nexa share. The companies announced the deal on Thursday. Following the closing of the transaction, Boliden has agreed to launch a cash tender offer for the remaining 35 per cent of Nexa shares. This offer must be made within 30 days of closing, or within 60 days in certain circumstances. The tender price will be determined by the same exchange ratio and Boliden’s 20-day average share price before the deal closes.

Mikael Staffas, chief executive of Boliden, stated that the acquisition will strengthen the company’s position as a major global base metal producer. He noted that the deal will add a healthy component to the precious metal business, significantly increasing silver output in concentrate. Staffas added that the combined project portfolio of Boliden and Nexa will be highly attractive and provide a solid foundation for future growth. This acquisition follows Boliden’s $1.4 billion purchase last year of the Neves-Corvo copper-zinc mine in Portugal and the Zinkgruvan zinc mine in Sweden from Lundin Mining. That deal, completed in April 2025, nearly doubled Boliden’s zinc concentrate production and substantially increased its copper output.

Nexa operates five polymetallic mines and three zinc smelters in Brazil and Peru. Its mining assets include Cerro Lindo, El Porvenir and Atacocha in Peru, as well as Vazante and the ramping-up Aripuanã operation in Brazil. The smelting facilities comprise Cajamarquilla in Peru, which is the largest zinc smelter in the Americas, and Três Marias and Juiz de Fora in Brazil. BMO Capital Markets mining analyst Alexander Pearce estimates that Nexa would add approximately 240,000 tonnes of attributable mined zinc, 18,000 tonnes of copper and seven million ounces of silver to Boliden in 2027. This would increase Boliden’s forecast mined zinc production by 62 per cent, copper by 14 per cent and silver by 64 per cent.

Once the transaction is complete, Boliden and Nexa will jointly operate 12 mining units and eight smelters across Europe and Latin America. On a combined basis, the companies generated approximately SEK136 billion in revenue and SEK38 billion in earnings before interest, taxes, depreciation and amortization during the 12 months ended June 30. Boliden estimates that the deal will immediately increase earnings per share by more than eight per cent. However, the acquisition will raise Boliden’s net debt-to-equity ratio to about 33 per cent from 24 per cent on a pro forma basis. The company has secured a $2 billion bridge facility to fund the tender for remaining Nexa shares, mandatory offers for minority interests in some Peruvian subsidiaries and potential refinancing at Nexa.

BMO noted that the valuation appears attractive, with the implied price representing about 3.2 times Nexa’s average forecast 2027-28 enterprise value to earnings before interest, taxes, depreciation and amortization. This compares with Boliden trading at about five times. BMO forecasts Nexa to generate $1.1 billion and $1.3 billion in earnings before interest, taxes, depreciation and amortization in those years. Pearce observed that while the deal adds significant production, meaningful synergies are not immediately obvious and it adds complexity to the integrated business. BMO maintains a Market Perform rating on Boliden with a SEK575 target. The $15.29 per share consideration represents a 14 per cent premium to Nexa’s 20-day volume-weighted average price on July 1, the last trading day before reports of talks surfaced. It is a 6.5 per cent premium to Nexa’s 20-day average through Wednesday. Nexa shares closed Wednesday at $15.58.

Votorantim will receive 21.4 million newly issued Boliden shares and own about seven per cent of the Swedish company after closing. The deal values all of Nexa at about $2 billion in equity and $3.7 billion including debt and other obligations. Votorantim will also have the right to nominate a representative to Boliden’s board. Boliden shares fell after the announcement in Stockholm, trading around SEK571 on Thursday, about 2.1 per cent below Wednesday’s close of SEK583.40. The transaction is expected to close in the first quarter of 2027, subject to approval by Boliden shareholders and regulators. Boliden expects four of Nexa’s seven directors to be affiliated with it after closing. Nexa will remain separately listed on the New York Stock Exchange, with most of its existing management expected to remain in place.