Hudbay Minerals to buy Arizona Sonoran in $1B deal

Hudbay Minerals (TSX, NYSE: HBM) said on Monday it will acquire Arizona Sonoran Copper Company (TSX: ASCU) (OTCQX: ASCUF) in an all-share deal valued at about C$1.48 billion ($1 billion), creating what the companies say will be the third-largest copper district in North America.

The Canadian miner will issue 0.242 of a common share for each Arizona Sonoran (ASCU) share it does not already own, valuing it at C$9.35 per share based on Hudbay’s Feb. 27, 2026 closing price. The offer represents a 30% premium to ASCU’s closing price that day and a 36% premium to its 20-day volume-weighted average price. Hudbay, which already owns about 9.99% of ASCU’s outstanding shares, said the enterprise value of the transaction, net of its existing stake, is approximately $1.28 billion.

The acquisition will give Hudbay full ownership of the Cactus copper project in Arizona and expand its US growth pipeline alongside its Copper World project. After closing, existing Hudbay shareholders will own about 89% of the combined company, with former ASCU shareholders holding roughly 11%.

Chief executive Peter Kukielski said the deal strengthens Hudbay’s position as a US-focused copper growth platform. He described Cactus as a large-scale development asset in a familiar mining jurisdiction and said the combined projects would form a major copper hub in Arizona while preserving financial flexibility.

Arizona Sonoran chief executive George Ogilvie said the transaction delivers immediate value and allows shareholders to retain exposure to Cactus through Hudbay shares. He added that Hudbay’s balance sheet and Arizona operating experience should reduce development and financing risk.

Strategic rationale

Hudbay said advancing Copper World and Cactus together would establish the third-largest copper district in North America, with the potential to become the second-largest US copper cathode district. Copper World is expected to produce 92,000 tonnes of copper annually by 2030, while Cactus could add a further 103,000 tonnes a year once developed.

The company also outlined regional synergies, including redeploying the Copper World construction team to Cactus, using sulphuric acid produced at Copper World to leach oxide ore at Cactus, and achieving between $5 million and $10 million in annual corporate savings.

The companies will complete the transaction through a court-approved plan of arrangement under British Columbia law. The deal requires approval from 66⅔% of votes cast by ASCU shareholders, 66⅔% of votes cast by shareholders and other securityholders voting together, and a simple majority of minority shareholders under Canadian securities rules.

Arizona Sonoran plans to hold a special meeting in May 2026. The transaction also requires US and Canadian regulatory approvals, court approval and stock exchange approvals. Both boards have unanimously approved the agreement and recommend shareholders vote in favour. The companies expect to close in the second quarter of 2026, after which ASCU shares will be delisted from the Toronto Stock Exchange and the company will seek to cease reporting issuer status.