Phelps Dodge Gets Bought

Together, the new company would become the largest North American mining company, according to a Freeport-McMoRan press release. Freeport-McMoRan is clearly betting that metal prices will remain strong. Metal prices traditionally are highly volatile and prone to periods of peaks and valleys.

"This transaction combines two leading mining companies to form a strong industry leader at a time when we see significant long-term opportunities in our industry,'' says Freeport-McMoRan's Chairman James Moffet. "FCX has been built through our exploration and development capabilities, and we will focus on aggressively pursuing opportunities in the extensive Phelps Dodge asset portfolio."

Freeport-McMoRan is being advised by JPMorgan Chase(JPM) and Merrill Lynch(MER).

Phelps Dodge is being advised by Citigroup(C) and Morgan Stanley(MS), which had served as advisor to Inco in the failed deal with Phelps.

The proxy statement for that earlier failed merger reveals that Morgan Stanley's investment bankers had been the driving force behind the three-way combination.

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