Xstrata: Main Conditions For Sphere Magnetite Acquisition Satisfied

The main conditions for Xstrata Plc's (XTA.LN) A$2.50-a-share takeover of junior Australian magnetite explorer Sphere Minerals Ltd. (SPH.AU) have been satisfied, the U.K.-listed diversified miner said Tuesday.

Xstrata said that the company had received confirmation that Sphere's mining licence in Mauritania is valid from the country's mining ministry and approval from Australia's Foreign Investment Review Board.

"Consequently, the only remaining conditions to the offer are the minimum acceptance condition of 90% of outstanding Sphere shares and customary conditions, including the absence of a material adverse change and certain prescribed occurrences," Xstrata said in a statement.

The takeover, which values the company at A$428 million, has been recommended by Sphere's board. Sphere's directors have also promised to sell all the shares which they hold or control to Xstrata's subsidiary, Sidero, once the offer becomes unconditional.

The offer will close on Oct. 19, Xstrata said.

The Sphere acquisition represents Xstrata's first major foray into iron ore, a key commodity for its rivals BHP Billiton Ltd. (BHP), Rio Tinto Plc (RTP), and Anglo American Plc (AAL.LN).

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail]