TY  - JOUR
AB  - Freeport-McMoRan's acquisition of Phelps Dodge created the world's largest publicly traded copper company. JPMorgan and Merrill Lynch advised the acquirer and arranged $17.5 billion in debt financing and $1.5 billion in credit facilities. In addition, these two firms underwrote $5 billion in equity capital through simultaneous offerings of Freeport-McMoRan common shares and mandatory convertible preferred shares. These financings created an optimal capital structure for the company that resulted in stronger credit ratings. The activities of the equity capital markets and sales groups at the underwriting firms are explored and the structure and benefits of mandatory convertible preferred shares is explained.To understand the role of investment banks in advising a large corporation regarding an acquisition and related financings in the capital markets. As part of this, the activities of an investment banking firm's equity capital markets group and their underwriting risks are analyzed. Finally, the structure of a mandatory convertible security is reviewed in terms of benefits to both issuers and investors.
VL  - 
IS  - 
SN  - 2474-6568
DO  - 10.1108/case.kellogg.2016.000128
UR  - https://doi.org/10.1108/case.kellogg.2016.000128
AU  - Stowell David P.
AU  - Rossmann Peter
PY  - 2017
Y1  - 2017/01/01
TI  - Freeport-McMoRan: Financing an Acquisition
T2  - Kellogg School of Management Cases
PB  - Kellogg School of Management
SP  - 1
EP  - 19
Y2  - 2024/04/23
ER  -