COFECE Approves Pan American Silver’s Acquisition of MAG Silver: Enhancing Precious Metals Market Presence

Pan American Silver has received approval from Mexico's Federal Economic Competition Commission (COFECE) to acquire MAG Silver Corp. The acquisition is expected to be completed by September 4, 2025, and strengthens Pan American's position in the precious metals market. The acquisition is significant for Pan American and offers potential growth opportunities for stakeholders.

Pan American Silver has received the final regulatory approval from Mexico's Federal Economic Competition Commission (COFECE) to acquire MAG Silver Corp. The acquisition, valued at approximately $2.1 billion (C$2.91 billion), marks a significant milestone in Pan American's strategic expansion into the precious metals market. The deal is expected to close on September 4, 2025, following the receipt of all necessary regulatory, shareholder, and court approvals [1].

The acquisition of MAG Silver, a Canadian exploration company, will significantly enhance Pan American's exposure to high-margin silver ounces and offer future growth opportunities through MAG's exploration properties. MAG Silver's principal asset, the Juanicipio Project, is a 4,000 tonnes per day mine operated by Fresnillo Plc. The project is located in the Fresnillo Silver Trend in Mexico, which is known for its high-grade precious metals deposits [2].

The acquisition aligns with Pan American's strategy to expand its footprint in the Americas and enhance its precious metals portfolio. Pan American currently operates mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile, and Argentina. The company's Escobal mine in Guatemala, currently not operating, and various exploration and development projects also contribute to its diverse operations [1].

The transaction carries a total value of $2.1 billion, with a $500 million cash component and the remainder in Pan American shares. MAG Silver shareholders have been presented with two options for consideration: Option 1: $20.54 cash per share, Option 2: $0.0001 cash plus 0.755 Pan American shares per MAG share. This flexible structure allows shareholders to choose between immediate liquidity or continued participation in the growth potential of the combined entity [2].

The acquisition reflects Pan American's focused strategy of building a premier precious metals portfolio with assets located exclusively in the Americas, prioritizing high-grade operations in stable mining jurisdictions. The combined entity will control a larger share of global silver production, particularly in Mexico, which is the world's largest silver-producing country. According to The Silver Institute's World Silver Survey 2024, Mexico accounts for approximately 23% of global mine production, with total worldwide production reaching approximately 830 million ounces in 2023 [2].

This acquisition follows the broader trend of consolidation in the precious metals mining sector, where companies are increasingly focusing on building portfolios of high-grade, low-cost operations in stable jurisdictions. The silver market is witnessing particular interest in consolidation due to growing industrial demand for silver, especially in renewable energy applications, and the strategic importance of securing high-grade reserves in established mining districts [2].

References:
[1] https://finance.yahoo.com/news/cofece-approves-pan-american-silvers-104500017.html
[2] https://discoveryalert.com.au/news/pan-american-silver-mag-silver-acquisition-2025-impact/