African uranium mining operation UraMin is set to be acquired by Areva after a friendly cash offer for 100% of the share capital was recommended by the board.

Based on a price of $7.75 per UraMin share, the total offer consideration amounts to more than $2.5 billion, a premium of about 2% over the UraMin average trading price.

Areva already owns 5.5% of UraMin's share capital and the offer is conditional upon, in particular, the tendering of a minimum of 75% of the outstanding shares.

Through the company’s main projects, located in South Africa, Namibia, and Central African Republic, Areva plans to reach a yearly production of about 9 million kgs of U3O8 after 2012.

BMO Capital Markets is acting as financial advisors and Heenan Blaikie is acting as legal counsel to UraMin. NM Rothschild is acting as financial advisor to Areva with Blake Cassels & Graydon providing legal counsel.