A Boliden, Nexa Resources Combination Would Create a Major Zinc Player — Market Talk

Swedish miner Boliden's potential acquisition of Votorantim's 64.7% stake in Nexa Resources could create a dominant player in the global zinc market, UBS analyst Daniel Major writes. A combination of Nexa's and Boliden's operations would create the third largest zinc miner and smelter globally, he adds. Adding scale and diversification in both mining and smelting could generate some synergies from things like marketing, but UBS sees limited potential operational synergies between Boliden in Europe and Nexa in Latin America. Nexa's current consensus valuation is cheaper than Boliden's, and Nexa has more financial leverage and lower asset quality, the bank says. Nexa has $1.7 billion market capitalization, implying a current equity valuation for Votorantim's stake of around $1.1 billion, equating to around 7% of Boliden's market capitalization. Shares in Boliden rise 0.5%. (dominic.chopping@wsj.com)