FILED BY NORANDA INC.
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT
OF 1933
SUBJECT COMPANY: FALCONBRIDGE LIMITED
COMMISSION FILE NO.: 33-95280
INVESTOR INFORMATION
This communication is being made in respect of the proposed combination
(the "Merger") involving Noranda Inc. and Falconbridge Limited. The
proposed Merger will be completed by way of a share exchange take-over bid
under which Falconbridge common shareholders (other than Noranda) will be
offered 1.77 Noranda common shares for each Falconbridge common share. In
connection with the proposed Merger, Noranda will prepare and file with the
U.S. Securities and Exchange Commission (the "SEC"), if required, a
registration statement on Form F-8 containing a share exchange take-over
bid circular to be delivered to the shareholders of Falconbridge. Noranda,
if required, will be filing other documents regarding the proposed Merger
with the SEC.
INVESTORS ARE URGED TO READ CAREFULLY THE SHARE EXCHANGE TAKE-OVER BID
CIRCULAR WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain the documents filed with the SEC free of
charge at the SEC's website (www.sec.gov). In addition, documents filed
with the SEC by Noranda may be obtained free of charge by contacting
Noranda at 416-982-7111.
[NORANDA LOGO] [FALCONBRIDGE LOGO] [GRAPHICS OMITTED - PHOTOGRAPHS]
Conference Call for Proposed Merger
March 9, 2005
[NORANDA LOGO] [FALCONBRIDGE LOGO]
Forward-Looking Statements
NORANDA AND FALCONBRIDGE CAUTION THAT STATEMENTS MADE TO DESCRIBE THE
COMPANIES' INTENTIONS, EXPECTATIONS OR PREDICTIONS MAY BE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECURITIES LAWS. THE COMPANIES CAUTION
THAT, BY THEIR NATURE, FORWARD-LOOKING STATEMENTS INVOLVE RISK AND
UNCERTAINTY AND THAT THE COMPANIES' ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE EXPRESSED OR IMPLIED IN SUCH STATEMENTS. REFERENCE SHOULD BE
MADE TO THE COMPANIES' MOST RECENT ANNUAL INFORMATION FORM FOR A
DESCRIPTION OF THE MAJOR RISK FACTORS.
ALL DOLLAR AMOUNTS EXPRESSED IN U.S. DOLLARS
ALL PRODUCTION VOLUMES AND RESERVES AND RESOURCES IN METRIC TONNES
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Conference Call
Speakers
o Derek Pannell, President & CEO of Noranda
o Aaron Regent, President & CEO of Falconbridge
o Steve Douglas, Executive VP & CFO of Noranda
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Summary of Transaction
o All-encompassing plan addresses the critical issues faced by our
companies and investors
- Noranda will offer to repurchase up to $1.25 billion of its
common shares, in exchange for junior preferred shares of the
company
- The merger will take place by way of a share exchange where each
Falconbridge shareholder will receive 1.77 Noranda shares
o 15% premium to Falconbridge's average share price from last
20 days
- Brascan has indicated that it will tender 123 million of its
common shares, which if repurchased will reduce Brascan's
ownership to between 16% and 26% from current level of 41%
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Noranda Falconbridge Well Positioned
Amongst Int'l Mid-Tiers
MID-TIER BASE METAL COMPANIES - TOTAL ENTERPRISE VALUE(1)
(US$Billions)
[GRAPHIC OMITTED - Chart showing Total Enterprise Value of Mid-Tier Base
Metal Companies]
(1) Source - Bloomberg. Total Enterprise Value calculated as market
capitalization (including convertible securities and preferred
shares), plus minority interest plus net debt.
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Benefits of Transaction
o NorandaFalconbridge will be re-established as a widely-held, major
base-metal producer
o The current cap on both companies' share prices, due to ownership
uncertainties, will be eliminated, which could improve share price
performance
o The simplified corporate structure should also enhance the company's
appeal to shareholders
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Summary Profile
o NorandaFalconbridge statistics:
- Operations in 18 countries
- One of the world's largest base metals companies
o Refined nickel production: 101,00 tonnes in 2004
o Refined copper production: 527,000 tonnes in 2004
o Mined zinc production: 528,000 tonnes in 2004
o Fully-integrated aluminum business
COMBINED COMPANY WILL HAVE EXCEPTIONAL GROWTH POTENTIAL
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Copper
[GRAPHIC OMITTED - Map of the world showing "Existing Operation" at the
following sites: Horne, Kidd Creek, CCR, Antamina, Collahuasi, Lomas Bayas
and Altonorte; and showing "Development Project" at the following sites: El
Morro, El Pachon, West Wall and Frieda River.]
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Nickel
[GRAPHIC OMITTED - Map of the world showing "Existing Operation" at the
following sites: INO - Raglan, INO - Sudbuy, Falcondo and INO - Nikkelverk;
and showing "Project" at the following sites: Kabanga and Koniambo.]
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Zinc
[GRAPHIC OMITTED - Map of the world showing "Existing Operation" at the
following sites: Kidd Creek, C.E.Z., Brunswick, and Antamina; and showing
"Project" at the following sites: Perseverance, Lennard Shelf and Lady
Loretta.]
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Aluminum
[GRAPHIC OMITTED - Map of Canada and U.S.A showing "Existing Operation" at
the following sites: Huntingdon, New Madrid, Newport, Gramercy, Salisbury
and St. Ann.]
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Conference Call
Speakers
o Derek Pannell, President & CEO of Noranda
o Aaron Regent, President & CEO of Falconbridge
o Steve Douglas, Executive VP & CFO of Noranda
12
[NORANDA LOGO] [FALCONBRIDGE LOGO]
Falconbridge Process
o Falconbridge Board of Directors formed a Special Committee comprised
solely of Independent Directors
- Mandate: to review transaction and make a recommendation to the
Falconbridge Board of Directors
o Special Committee retained independent legal advice from the law firm
Goodman's and separate financial advice from TD Securities
- TD Securities provided valuation and fairness opinion to the
Falconbridge Board of Directors that this transaction is fair for
Falconbridge's shareholders
o The Special Committee of the Board has been very engaged in this
process and has met 10 times over the last two months.
- Extensive negotiations on all aspects of the transaction have led
to meaningful improvements from the initial proposal
o Opinion of TD and the background to the transaction will be detailed
in Directors' Circular
Special Committee unanimously recommended that the Falconbridge Board of
Directors agree to merge with Noranda on the
basis of 1.77 Noranda shares for each Falconbridge share
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Benefits to Falconbridge Shareholders
o Transaction simplifies ownership structure and provides greater
ownership certainty going forward
o Uncertainty has hindered Falconbridge's share price performance
resulting in the stock trading at discount to peers
o Exchange ratio of 1.77 shares represents a 15% premium to
Falconbridge's 20-day average market price
o Shareholders can continue to participate in Falconbridge
ownership through ownership in new company
o Brascan's ownership will be reduced to 16%-26%
o Control of new company largely back into the market
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Benefits to Falconbridge Shareholders
o Increased size and diversification of new company will facilitate
ability to advance new growth initiatives and reduce concentration
risk of any one project or operation
o Falconbridge shareholders will own approximately 36% of new company
compared to the 41% currently owned of Falconbridge
o Similar exposure to Falconbridge's existing copper and nickel
assets, as well as exposure to zinc and aluminum, two metals
whose strong fundamentals present a potential upside
o Proposal from Noranda requires that a majority of Falconbridge
minority shareholders tender to the transaction
o Majority of Falconbridge shareholders required to support this
bid in order to proceed
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Conference Call
Speakers
o Derek Pannell, President & CEO of Noranda
o Aaron Regent, President & CEO of Falconbridge
o Steve Douglas, Executive VP & CFO of Noranda
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Transaction Description
o To implement its strategic plan NorandaFalconbridge will pursue two
transactions
- TRANSACTION #1: an issuer bid by Noranda to all Noranda
shareholders for US$1.25 billion of common shares in exchange for
US$1.25 billion of junior preferred shares
- TRANSACTION #2: a merger between Noranda and Falconbridge on a
share exchange basis of 1.77 Noranda shares for each Falconbridge
common share
o Completion of Transaction #1 will occur just before #2. Once both
transactions are complete the intent is that NorandaFalconbridge will
be a widely-held public Canadian company with minimal capital
structure complexities
o Depending on the level of non-Brascan participation in the issuer bid,
Brascan's ownership stake could decrease to less than 20%
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Share Exchange
EXCHANGE RATIO: 1.77
SHARES OF FALCONBRIDGE IN FLOAT - 000S: 74,967
NORANDA SHARES ISSUED TO ACQUIRE FALCONBRIDGE - 000S (ESTIMATE) 132,692
NORANDA SHARES ACQUIRED ON SHARE REPURCHASE - 000S (ESTIMATE) (63,377)
--------------------------------------------------------------------------
NET NEW SHARES ISSUED 000S 69,315
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TOTAL SHARES OUTSTANDING 366,285
FALCONBRIDGE SHAREHOLDERS - OWNERSHIP OF NEW COMPANY 36%
NORANDA SHAREHOLDERS - OWNERSHIP OF NEW COMPANY 64%
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Share Repurchase - Preferred Share Terms
o There will be a maximum of US$1.25 billion of preferred shares
available to shareholders in 3 series as set out below. In the event
the offer is oversubscribed, shareholders' participation will be
pro-rated.
o The issuer bid will result in a repurchase of approximately 63.4
million Noranda common shares at a price of US$19.72 per share
o Both the face value and dividend can be repaid with common shares of
the company.
SELECT TERMS OF PREFERRED SHARES
SERIES 1 SERIES 2 SERIES 3
--------------------------------------------------------------------------------
Amount US$500 mm US$500 mm US$250 mm
Soft Retraction 5 year (90%) 7 year (90%) 10 year (90%)
Initial Coupon (TBD) 6.00% 6.25% 6.50%
Rate Reset N/A Year 5 Years 5,7,9
Redemption Anytime @101% Anytime @101% Anytime @101%
--------------------------------------------------------------------------------
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Financial Impact - Summary
o Merger of Falconbridge increases capital base of new entity and
strengthens leverage ratios compared to pre-transaction levels.
o Simplified capital structure should be investor and creditor friendly.
o Access to consolidated cash flows greatly increases coverage ratios
and financial flexibility.
-----------------------------------------------------------------
FINANCING PLAN - US$ MILLIONS(1)
-----------------------------------------------------------------
USES
Falconbridge Merger $ (2,520)
Issuer Bid - US$000s $ (1,250)
-----------------------------------------------------------------
$ (3,770)
-----------------------------------------------------------------
SOURCES
Issue common shares to Falconbridge Shareholders $ 2,520
Issue preferred shares on issuer bid $ 1,250
-----------------------------------------------------------------
$ 3,770
-----------------------------------------------------------------
(1) Subject to confirmation at time of acquisition
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Noranda Falconbridge
Indicative Pro forma Balance Sheet
(as at December 31, 2004)
--------------------------------------------------------------------------------
THE TWO-STEP TRANSACTION INCREASES THE CAPITAL BASE DUE TO THE MERGER OF
FALCONBRIDGE
--------------------------------------------------------------------------------
NORANDA MERGE BUY-BACK
INC. FALCONBRIDGE SHARES PROFORMA
------- ------------ -------- --------
(Unaudited - US$ Millions)
ASSETS
Cash and cash equivalents 884 - - 884
Short-term investments - - -
Accounts receivable 931 - 931
Metals and other inventories 1,436 - 1,436
----------------------------------------
Current assets 3,251 - - 3,251
----------------------------------------
Operating capital assets 4,870 1,441 6,311
Development projects 1,166 721 1,887
Investments and other assets 324 - 324
----------------------------------------
9,611 2,162 - 11,773
========================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts and taxes payable 1,248 - 1,248
Debt due within one year 570 - 570
----------------------------------------
Current liabilities 1,818 - - 1,818
----------------------------------------
Long-term debt 2,638 - - 2,638
Preferred shares - - 1,250 1,250
Convertible debentures 89 - - 89
----------------------------------------
2,727 - 1,250 3,977
----------------------------------------
Future income taxes 304 648 - 952
Asset retirement obligation, pension
and other provisions 595 - - 595
STOCKHOLDERS' INTERESTS
Interests of other shareholders 1,197 (1,006) - 191
Capital stock - preferred 295 - - 295
Capital stock - common 2,675 2,520 (1,250) 3,945
----------------------------------------
2,970 2,520 (1,250) 4,240
----------------------------------------
9,611 2,162 - 11,773
========================================
The pro forma financial statements may not be indicative of results that
actually would have occurred if the events reflected therein had been in
effect on the dates indicated or of the results that may be obtained in the
future. (Estimated using shares valued at March 4, 2005)
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Noranda Falconbridge
Indicative Pro forma Income Statement
(For the year ended December 31, 2004)
NORANDA MERGE ADDITIONAL 2004
INC. FALCONBRIDGE DIVIDENDS PRO-FORMA
------- ------------ ---------- ---------
(UNAUDITED - US$ MILLIONS)
Revenues 6,978 - - 6,978
-----------------------------------------
6,978 - - 6,978
-----------------------------------------
OPERATING EXPENSES
Cost of operations 2,094 - - 2,094
Purchases raw materials 3,005 - - 3,005
Depreciation, amortization and accretion 499 48 - 547
-----------------------------------------
TOTAL OPERATING EXPENSES 5,598 48 - 5,646
-----------------------------------------
INCOME GENERATED BY OPERATING ASSETS 1,380 (48) - 1,332
-----------------------------------------
Interest expense, net 119 - 78 197
Corporate and general adminstration 66 - - 66
Research, development and exploration 47 - - 47
Minority interest in earnings in
subsidiaries 297 (274) - 23
-----------------------------------------
529 (274) 78 333
-----------------------------------------
INCOME BEFORE UNDERNOTED 851 226 (78) 999
-----------------------------------------
Tax expense 333 (14) - 319
Gain net of restructuring costs and other (33) - - (33)
-----------------------------------------
NET INCOME 551 240 (78) 713
=========================================
BASIC EARNINGS PER SHARE $ 1.78 $ 1.89
DILUTED EARNINGS PER SHARE $ 1.75 $ 1.85
The pro forma financial statements may not be indicative of results that
actually would have occurred if the events reflected therein had been in
effect on the dates indicated or of the results that may be obtained in the
future. (Estimated using shares valued at March 4, 2005)
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Potential Impact on Share Price
[GRAPHIC OMITTED - Chart showing price/cash flow, as at March 3, 2005, for
NorandaFalconbridge, Mid-Tier and Large-Cap companies (Source: Bloomberg,
I/B/E/S. First Call (2005E))]
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Conference Call
Speakers
o Derek Pannell, President & CEO of Noranda
o Aaron Regent, President & CEO of Falconbridge
o Steve Douglas, Executive VP & CFO of Noranda
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
Concluding Remarks
Merger will be accomplished without disruption
- Management team already integrated
- HR programs the same for both companies
- Exploration, business development, legal, environmental health &
safety, logistics and information services already combined
o New management structure:
- CEO: Derek Pannell
- President: Aaron Regent
- COO: Peter Kukielski
- CFO: Steve Douglas
o NorandaFalconbridge
- Improved platform to build shareholder value
- Proven Management Team
- Positioned to benefit from positive industry outlook
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[NORANDA LOGO] [FALCONBRIDGE LOGO]
[NORANDA LOGO] [FALCONBRIDGE LOGO] [GRAPHICS OMITTED - PHOTOGRAPHS]
Conference Call for Proposed Merger
March 9, 2005
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