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Orica Ltd

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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation

Corporate Action: We Don’t Recommend Participation in an up to AUD 600 Million Raising to Fund Exsa

No-moat Orica will acquire an 83.5% stake in Peru’s Exsa S.A. for USD 203 million from Grupo Breca. This is not a particularly large acquisition but will strategically consolidate the Latin American market position. Exsa’s circa 300 kilotonnes of ammonium nitrate, or AN, production in 2019 equates to around 7.5% of Orica’s global production but around 40% of Orica’s Latin American output. Orica intends to de-list Exsa, if it can successfully acquire minority interests in a separate tender offer.

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