Under the agreement, Rea will purchase the assets, including certain copper inventory, for approximately $125 million in cash, subject to a working capital adjustment at the time of closing.
Phelps Dodge expects to record a special, net after-tax loss on the transaction of approximately $20 million, which includes the sale of approximately 25 million pounds of copper from Phelps Dodge to Rea valued at an inventory cost of approximately 80 cents per pound, which will be priced at closing, and costs for severance and early-retirement benefits.
The sale will include Phelps Dodge manufacturing operations in
The transaction will not include the
Under the agreement, Phelps Dodge will continue to be a primary supplier of copper rod to Rea.
Phelps Dodge anticipates that nearly all its approximately 600 magnet wire employees involved in plant manufacturing operations will be offered positions with Rea.
The sale is subject to customary closing conditions, including regulatory approvals.