Noranda and Falconbridge Merge

On March 9, 2005, Noranda Inc. announced an all-encompassing plan to combine Noranda and Falconbridge Ltd. to create one of North America’s largest base-metals companies. The transaction was proposed to help resolve the dual public ownership structure of Noranda and Falconbridge, and brought Noranda’s strategic alternatives review process to a close. The combination was unanimously recommended by the independent directors of Falconbridge and was effected by way of a share exchange take-over bid in which each Falconbridge shareholder other than Noranda was offered 1.77 Noranda shares for each Falconbridge share. The offer represented a 15 per cent premium to the 20-day average share price for the period ending March 7, 2005. Approximately 58 million Falconbridge common shares were validly deposited under the bid, representing 78 per cent of the shares held by minority shareholders, and Noranda took up the shares on May 6, 2005. Noranda completed its combination with Falconbridge on June 30, 2005 by way of an amalgamation with Falconbridge with the name of the combined company being Falconbridge Ltd.

Prior to the take-over bid transaction, Noranda repurchased 63.4 million of its common shares, in exchange for three series of junior preferred shares of the Company (the issuer bid) with an aggregate stated value of US$1.25 billion, by way of substantial issuer bid. As part of the transaction, Brascan agreed to tender its common shares of Noranda to the issuer bid. Immediately following completion of Noranda’s combination with Falconbridge, Brascan’s ownership of common shares was reduced to approximately 20 per cent from the approximately 41 per cent it held in Noranda prior to these transactions.
The benefits of the transactions include the simplification of the ownership structure of Noranda and Falconbridge and a substantial increase in the public float and share liquidity of the combined company. The larger market capitalization and simplified corporate ownership structure is expected to attract a greater institutional investor base for the combined company and the increased size, diversification and financial capability of the new combined company is expected to facilitate future growth.

Noranda was represented by McCarthy Tétrault LLP with a team led by Garth Girvan and Jonathan Grant that included Frank DeLuca, Roger Chouinard, Martha Hundert and Katarzyna Szybiak (corporate/ securities), Robert Stephenson (bank-ing), Gabrielle Richards, Jerald Wortsman and Andrew Silverman (tax) and Niels Ortved (litigation). Frank Allen, Dyana McLellan and Paul Simon of Borden Ladner Gervais LLP acted for the Independent Committee of the Board of Directors of Noranda.

Lawrence Chernin, Michael Partridge and Alireza Ziai (corporate/securities) and Benjamin Zarnett (litigation) of Goodmans LLP acted as counsel to the independent committee of Falconbridge.

Brascan was represented by Torys LLP with a team in Toronto that included Brian Davis, Karrin Powys-Lybbe and Joanna Jazairi (corporate) and Jim Welkoff and Catrina Card (tax). Torys’ New York team included Dan Miller and Margaret Walrath (corporate), with assistance from Jim Turner, Peter Jewett, Bill Estey and Michelle Campbell in Toronto.