Canadian mining company Dundee Precious Metals (TSX: DPM) has announced plans to acquire UK-based Adriatic Metals plc (LON: ADT1) in a cash-and-stock deal valued at approximately $1.25 billion. The transaction, one of the latest in a string of foreign acquisitions targeting British companies, will give Dundee control of Adriatic’s mineral assets in southeastern Europe, including the Vareš silver-zinc project in Bosnia and Herzegovina and the Raška project in Serbia.

The offer provides Adriatic shareholders with 268 pence per share, consisting of 93 pence in cash and 0.1590 new shares in Dundee. This represents a 50.5% premium over Adriatic’s closing share price of 177.8 pence on May 19, the last trading day before the companies publicly confirmed they were in negotiations.

With the deal’s completion, Dundee shareholders will own 75.3% of the combined entity, while Adriatic shareholders will hold the remaining 24.7%. According to a joint statement, Dundee has secured commitments from Adriatic’s board of directors and major shareholders who collectively represent 37.2% of the company’s shares in favor of the acquisition.

Dundee Expands Presence in the Balkans

With this transaction, Dundee will expand its presence in the Balkans, a region where it is already operational. The deal includes two of Adriatic’s primary assets: the Vareš polymetallic project in central Bosnia and the Raška zinc-silver project in southwestern Serbia. In a statement issued with the announcement, Dundee CEO David Rae characterized the acquisition as a means of strengthening the company’s asset portfolio. “The Vareš is a logical fit with our portfolio, and adds near-term production growth and mine life, a highly prospective land package, and cash flow diversification,” Rae stated.

The Vareš project is Adriatic’s flagship asset and is viewed as a key reason for Dundee’s interest. The project is in an advanced stage of development and, according to Adriatic, remains on schedule to begin production. Adriatic CEO Laura Tyler stated that Vareš is poised to become a low-cost operation supported by a high-grade deposit, long mine life, and ongoing exploration prospects. The Raška project, while less advanced, is also considered to have long-term development potential. No timeline has been announced for its future progress.

Leadership and Organizational Changes

Significant leadership changes will follow the completion of the acquisition. Adriatic CEO Laura Tyler and Chief Financial Officer Michael Horner will depart their roles once the transaction is finalized. In addition, all members of Adriatic’s board of directors will resign.

Following the merger, the combined company will maintain its global headquarters in Toronto, Canada. Adriatic’s existing London office will be closed, marking a consolidation of operations under Dundee’s management structure. Adriatic’s shares rose following the announcement, climbing 4% in mid-afternoon trading on the London Stock Exchange to reach 250.5 pence per share. This increase brought the company’s market capitalization to nearly £862 million, equivalent to about $1.2 billion, just below the total value of the proposed acquisition.

The announcement concludes a week of heightened M&A activity in London, reflecting increasing interest from foreign investors in UK-listed assets. Currency fluctuations, relatively low valuations, and a favorable regulatory climate have been cited by analysts as factors encouraging this trend.

The mining sector has seen renewed consolidation activity in recent years, as companies seek to secure future production sources amid fluctuating commodity prices and increased global demand for metals used in energy transition technologies. Silver and zinc, the primary metals in Adriatic’s Bosnian and Serbian assets, are both considered critical in the manufacture of batteries, solar panels, and various industrial applications.

The transaction remains subject to approval by regulatory authorities and Adriatic’s shareholders. The companies did not provide a specific timeline for closing the deal, though preliminary shareholder support and the premium offered suggest that significant opposition is not expected.

Dundee Precious Metals currently operates mining and processing assets in Eastern Europe and Africa. Its portfolio includes the Chelopech gold-copper mine in Bulgaria and the Tsumeb smelter in Namibia. The integration of Adriatic’s Balkan projects is expected to expand its production pipeline, though operational timelines for the newly acquired assets were not disclosed.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.