VANCOUVER (CP) -- Nemi announced the deal Tuesday, saying Aviva shareholders will get 0.59 Nemi shares for each Aviva shares they hold. Existing shareholders of Nemi and the former shareholders of Aviva will each hold about 50 per cent of the expanded share capital of the merged group.
The merger will create a diversified coal and energy producer and developer with operations in Canada, Australia and Botswana in southern Africa, the companies said.
The merger values Nemi at about 43 cents a share. The company, which trades on the Toronto Stock Exchange, has about 57.9 million shares outstanding so has a value under the merger transaction of about $C24.8 million.
"When we look at the landscape of parties active in the coal development arena globally with whom we could partner to grow our business and create value Aviva easily stands apart from the rest in terms of complementary assets, management team and overall fit," said Pat Devlin, president and CEO of Nemi.
"We believe we will be positioned as a leading growth-oriented coal and energy producer with a global mandate, an outstanding inventory of coal resources, key top-tier partners, and managerial and technical skills to drive future growth. Despite the current market difficulties, I'm confident in the fundamentals of the merger and the capabilities of our combined team."
Lindsay Reed, CEO of Aviva, said the two companies "are bringing together symbiotic assets, people skills and shareholders."
"Through this combination we expect to accelerate growth and capitalize on the strength of each business in the development of both metallurgical and thermal coal deposits."
Nemi is focused on the exploration, development and production of metallurgical coal projects in northeast British Columbia.
Aviva is an integrated energy company listed on both the Australian Securities Exchange and Botswana Stock Exchange. The company's most advanced asset is the Coolimba Power project in Western Australia.
Aviva has 118.6 million shares outstanding, which are each valued at $A0.32 under the deal.
In early trading Tuesday on the TSX, Nemi shares rose 2.5 cents to 27 cents, a gain of 10.2%.
(c) The Canadian Press