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Rare-Earth Bust Spurs Molycorp’s Biggest Takeover Bet: Real M&A

Molycorp Inc., after losing two-thirds of its value in 10 months as demand for rare-earth metals imploded, is now seeking to boost shareholder returns with its biggest takeover yet.

The owner of the largest rare-earth deposit outside China yesterday agreed to buy Neo Material Technologies Inc. for C$1.3 billion ($1.3 billion) in cash and stock. At 4.7 times earnings before interest, taxes, depreciation and amortization, the deal is the cheapest by a diversified metals producer on record, according to data compiled by Bloomberg. Molycorp’s stock rallied by the most on record after the announcement.