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Australia's CIMIC to sell 50% of mining services business Thiess to Elliott

CIMIC Group said on Monday it will sell half of its mining services business to activist hedge fund Elliott Management, valuing the unit Thiess at A$4.3 billion ($3.04 billion).

Adds details of deal terms

Oct 19 (Reuters) - CIMIC Group CIM.AX said on Monday it will sell half of its mining services business to activist hedge fund Elliott Management, valuing the unit Thiess at A$4.3 billion ($3.04 billion).

CIMIC, which will continue to hold the remaining 50% of Thiess, expects a pre-tax gain on the stake sale of around A$2.2 billion and a post-tax gain of around A$1.4 billion.

The deal would imply a 50% stake is worth a little over A$2 billion and includes an option for CIMIC to repurchase Elliott's half of the world's largest mining services provider within three to six years at a potentially lower price.

It will also beef up the Australian contractor's balance sheet with cash of around A$1.7 billion to A$1.9 billion, CIMIC said.

Also in the agreement is an option for a potential initial public offering or a sale to a third party, it added.

($1 = 1.4136 Australian dollars)

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Diane Craft and Daniel Wallis)

((NikhilKurian.Nainan@thomsonreuters.com; Twitter: @NikhilKurianN; +91 806 182 2724;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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