Hudbay Minerals Inc. has agreed to acquire Arizona Sonoran Copper Company Inc. (ASCU) in an all-share deal valued at approximately $2 billion (US$1.48 billion), combining two copper growth projects in Arizona to form the third-largest copper district in North America.
Hudbay is a copper-focused mining company with three long-life operations and a pipeline of growth projects in Canada, Peru and the United States. Its operating portfolio includes the Constancia mine in Peru, the Snow Lake operations in Manitoba and the Copper Mountain mine in British Columbia. Arizona Sonoran is a copper development company headquartered in Tempe, Arizona, whose principal asset is a 100 percent interest in the Cactus project, a past-producing copper mine located roughly 70 kilometres south of Phoenix.
Under the arrangement agreement, ASCU shareholders will receive 0.242 of a Hudbay share for each ASCU share held, implying a price of approximately $9.35 per share. That represents a 30 percent premium to ASCU's closing price and a 36 percent premium on a 20-day volume-weighted average basis. Hudbay already holds about 10 percent of ASCU. After closing, existing Hudbay shareholders will own roughly 89 percent of the combined company, with ASCU shareholders holding the remaining 11 percent.
The deal gives Hudbay full ownership of ASCU's Cactus project in southern Arizona, which will sit alongside Hudbay's Copper World development. Together, the two projects are expected to produce approximately 92,000 tonnes of copper annually from Copper World by 2030, with Cactus adding a further 103,000 tonnes once operational.
“The acquisition of ASCU is a highly compelling transaction that further enhances Hudbay’s copper growth platform in the U.S.,” Hudbay president and CEO Peter Kukielski said in a press release. “Cactus is a high-quality, large‑scale copper development asset in a mining jurisdiction that we know well. Together with the advancement of Copper World, this transaction creates one of the most significant copper districts in North America and reinforces Hudbay’s position as a premier copper growth company.”
“This transaction delivers ASCU shareholders compelling value,” said ASCU president and CEO George Ogilvie. “Through ownership in Hudbay, our shareholders will gain immediate exposure to strong cash flow generation from a larger, diversified and well‑capitalized operating platform, while continuing to participate in the long‑term value of Cactus and adding exposure to Hudbay’s Copper World project as part of a new major copper hub in Arizona. Hudbay’s strong balance sheet, proven track record in Arizona, and disciplined approach to project development meaningfully de‑risks the development of Cactus and positions it for long‑term success.”
“As part of Hudbay, the financial dilution and execution risks of constructing Cactus are significantly lessened, providing a clear path to copper cathode production,” ASCU chair of the board of directors David Laing said. “More importantly, in joining with Hudbay, we put the project in the good hands of the 3rd largest copper producer listed on the New York Stock Exchange, and in what will become the 3rd largest copper district in North America.”
Both boards have unanimously approved the transaction. Scotiabank and Origin Merchant Partners each provided fairness opinions to the ASCU board, and directors and officers holding about 1.1 percent of ASCU's voting shares have agreed to vote in favour.
Goodmans LLP and Baker McKenzie are acting as legal counsel to Hudbay, with TD Securities Inc. as financial advisor and National Bank Financial Inc. as strategic advisor. Osler, Hoskin & Harcourt LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal counsel to ASCU, with Scotiabank as financial advisor and Origin Merchant Partners providing an independent fairness opinion.
The deal is expected to close in the second quarter of 2026, subject to customary closing conditions.
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