The IGO Ltd (ASX: IGO) share price is in the green today as the exploration and mining company receives key support to acquire nickel producer, Western Areas Ltd (ASX: WSA).
The IGO share price is currently $12.37, a 1.23% gain.
Let's take a look at what the explorer announced.
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Key backing on nickel acquisition plan
IGO has received support from Andrew "Twiggy" Forrests' Wyloo Consolidated Investments for the acquisition of Western Areas.
Wyloo has 31,509,769 shares in Western Areas, equating to a 9.8% stake in the company. As part of the deal, Wyloo will vote in support of the acquisition.
Wyloo has also agreed not to acquire or dispose of any shares prior to the scheme implementation. Wyloo is a wholly-owned subsidiary of Wyloo Metals, which is a business division of Twiggy's Tattarang Group.
The details of the $1 billion takeover were shared with the market in December. The Western Areas board is recommending that shareholders vote in favour of IGO acquiring a 100% stake in the company for $3.36 per share.
Commenting on the announcement today, IGO CEO Peter Bradford said: "Our transaction to acquire Western Areas is on strategy and a sensible consolidation of Western Australian nickel production assets."
Perpetual Limited (ASX: PPT), which owns 14.7% of Western Areas shares, has previously indicated its intention to vote in favour of the nickel acquisition.
Deal to study nickel processing opportunities
In a separate deal, IGO and Wyloo Metals have agreed to study nickel downstream processing opportunities in Australia. IGO will fund 70% of the study and Wyloo Metals will cover 30% of it.
After the study is complete, the companies may form a joint venture to build a nickel downstream processing facility.
Commenting on this new nickel study, Bradford said:
Looking forward, our agreement with Wyloo Metals to investigate and, if economically feasible, advance
development of a downstream nickel processing facility represents a great opportunity to progress Australia's
relevance in the battery metals supply chain.IGO and Wyloo Metals have each had an aspiration to evaluate the potential for downstream nickel processing in Australia and our joint initiative is a step towards realising the ambitions of both companies.
IGO share price snapshot
The IGO share price has surged by 80% over the past year. In 2022, the shares are up by around 4%. For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.
IGO has a market capitalisation of roughly $9.25 billion based on today's share price.
