International law firm Freshfields Bruckhaus Deringer is advising SouthGobi Resources Ltd, a premium coal production and development company, in relation to the proposed proportional takeover bid by Aluminium Corporation of China (Chalco) for up to 60% of SouthGobi and a Cooperation Agreement entered into between SouthGobi and Chalco.

Chalco intends to make a proportional take-over offer for up to 60% of SouthGobi for US$925million. The offer will be made by way of a takeover bid under British Columbia law. SouthGobi’s 57.6 per cent majority shareholder Canada-based Ivanhoe Mines has agreed to tender all of its shares to the offer. 

Under the Cooperation Agreement, SouthGobi will have the right to offer up to 100% of its salable coal to Chalco and Chalco will have the obligation to purchase the coal at market prices for a period of 24 months. SouthGobi will also receive infrastructure support from Chalco. 

SouthGobi is listed on the Toronto stock exchange with a secondary listing on the Hong Kong Stock Exchange. Freshfields is acting as Hong Kong counsel to SouthGobi. 

“We are delighted to have been part of such a key development for SouthGobi. M&A activities within the energy and natural resources sector are definitely on the increase and we are particularly pleased to have the opportunity to showcase our expertise,” said Simon Weller, Freshfields’ partner who led the deal. 

The Freshfields team was led by Hong Kong based partner Simon Weller and Shanghai based partner Jack Wang. They were supported by senior associate Christian Zeppezauer and associates Huifang Chew and Shauna Loo.