EXHIBIT 99.1
Freeport-McMoRan Inc.
New Orleans, Louisiana
Confidential
July 25, 1997
Robert E. Fowler, Jr.
President and Chief Executive Officer
IMC Global Inc.
2100 Sanders Road
Northbrook, IL 60062-6146
Dear Bob:
Attached is a term sheet setting forth the principal terms and conditions
of our proposal for a stock merger (the "Merger") of Freeport-McMoRan Inc. and
IMC Global Inc. If you indicate your acceptance of the attached term sheet by
executing in the space provided below, this letter, together with the term
sheet, will constitute the mutual nonbinding statement of the intention of
Freeport-McMoRan Inc. and IMC Global Inc. to effect the Merger.
There will be a period commencing on the date that this letter has been
executed by you and ending on August 31, 1997, during which (i) each of the
parties will complete its due diligence and evaluation of the other party and
(ii) the parties will use their reasonable good faith efforts to negotiate a
mutually acceptable definitive agreement to effect the Merger. Except for the
obligations set forth in the foregoing sentence, neither this letter nor the
term sheet shall be deemed to be a binding agreement of the parties nor shall
such instruments create any legal obligation on behalf of Freeport-McMoRan
Inc., IMC Global Inc. or any of their respective representatives. Any such
agreement shall be created solely by a written, executed and delivered
definitive agreement.
Please confirm your acceptance of our proposal by executing two copies of
this letter and returning a fully executed copy to Freeport-McMoRan Inc. We
would intend to mutually publicly announce the proposed transaction immediately
thereafter. It is our expectation that the parties would enter into a
definitive agreement within one month after your execution and return of this
letter, that the necessary stockholders meetings will be held as soon as
practicable thereafter and that the closing will take place as soon as
practicable after such meetings.
Freeport-McMoRan Inc.
/s/Rene L. Latiolais
-------------------------
By: Rene L. Latiolais
Agreed and Accepted
this 25 day of July, 1997
IMC Global Inc.
/s/ Robert E. Fowler, Jr.
By: Robert E. Fowler, Jr.
Attachment
PROPOSAL
OF MERGER OF FREEPORT-MCMORAN INC. AND IMC GLOBAL INC.
SUMMARY OF KEY TERMS
JULY 1997
Basic Transaction: A stock-for-stock non-taxable merger (the
"Merger") of Freeport-McMoRan Inc. with IMC
Global Inc. (or one of its subsidiaries) in
a transaction accounted for as a purchase.
IMC Global Inc. will be the surviving
public company. Freeport-McMoRan Inc.
shareholders will receive 0.90 share of IMC
Global Inc. for each Freeport-McMoRan Inc.
share (the "Exchange Ratio"). In addition,
for each Freeport-McMoRan Inc. share there
will be issued a warrant entitling the
holder to acquire one-third share of IMC
Global Inc. at an exercise price equal to
$44.50 per share. Such warrants will
expire on the third anniversary of the
Merger. IMC Global Inc. will use its
reasonable good faith efforts to list the
warrants on the NYSE. In addition, prior
to consummation of the Merger, the Freeport
McMoRan Resource Partners, Limited
Partnership sulphur and Main Pass oil
business, as well as IMC Global Inc.'s
interests in the Main Pass 299 Joint
Ventures, will be contributed to a newly
formed subsidiary (Newco) of Freeport
McMoRan Resource Partners, Limited
Partnership, with the shares of Newco to be
distributed to Freeport McMoRan Resource
Partners, Limited Partnership public
unitholders and Freeport-McMoRan Inc.
shareholders. No consideration will be
paid to IMC Global Inc. for the
contribution of its Main Pass 299 Joint
Ventures interest to Newco.
Board Governance: The Board of IMC Global Inc. will be increased by
three and James Robert Moffett, Rene L. Latiolais
and one current member of the Freeport-McMoRan
Inc. Board selected by it will join the IMC
Global Inc. Board.
Management: At discretion of IMC Global Inc. Board, James
Robert Moffett and Rene L. Latiolais will retire
from Freeport-McMoRan Inc. and receive benefits
established by existing plans.
Management Stock Options
and Bonuses: 1997 Freeport-McMoRan Inc. management
bonuses under existing plans will be
protected. Value of stock options will be
preserved but transferred to IMC Global
Inc. stock. The value of Freeport-McMoRan
Inc.'s current long-term performance
incentive plan will be preserved.
Severance and other employee termination
costs of Freeport-McMoRan Inc. employees
will not be borne, directly or indirectly,
by Freeport-McMoRan Inc., IMC Global Inc.
or Freeport McMoRan Resource Partners,
Limited Partnership.
Freeport-McMoRan Inc./Freeport
McMoRan Resource Partners,
Limited Partnership G&A Savings: Current 1997 Freeport-McMoRan Inc./Freeport
McMoRan Resource Partners, Limited
Partnership G&A level is approximately
$40.5 million, not including IMC Global
Inc. allocations of approximately $18
million. Prior to closing, Freeport-McMoRan
Inc./Freeport McMoRan Resource
Partners, Limited Partnership will effect
future savings of G&A in the following
approximate amounts through absorption by
Newco, the new Sulphur/Main Pass oil
entity, employee severances, termination of
administrative services agreements with FM
Services Co. and Termination or expiration
of other Freeport-McMoRan Inc. commitments:
1998 1999 2000 2001 2002 2003 2004
------ ------ ------ ------ ------ ------ ------
(in millions)
$33 34.5 36 37.5 38.5 38.5 40.5
IMC Global Inc. will be required to incur costs
for administering Freeport McMoRan Resource
Partners, Limited Partnership, which now total
approximately $1.5 million annually.
Confidentiality: Standard confidentiality terms.
"Deal Protection Provisions": Conventional mutual no shop provisions with
fiduciary outs to be included in definitive
agreement.
Other Contractual Provisions: Conventional representations & warranties,
covenants and conditions appropriate for public
company mergers to be included in definitive
agreement. Covenants applicable between signing
of a definitive agreement and closing of the
transaction will preclude out-of-the-ordinary-
course transactions such as acquisitions.
Other: Exclusive and confidential negotiation
period until August 31. Due diligence
subject to mutual confidentiality
agreements. Transaction subject to: (i)
the negotiation, Board approval, execution
and delivery of a definitive merger
agreement; (ii) approval by Freeport-McMoRan Inc.
and IMC Global Inc. stockholders; (iii) the
expiration or early termination of all applicable
waiting periods under the Hart-Scott-Rodin Act and
receipt of any necessary regulatory and
third party consents and approvals and (iv)
satisfaction or waiver of other closing
conditions specified in the written
agreement.
Proposed Timetable: Consistent with that prepared by IMC Global
Inc. in September 1996, subject to possible
adjustment to accommodate distribution of
Newco.