Dominion Diamond has accepted The Washington Companies’ offer to buy the diamond miner for US$1.2 billion, the companies announced on July 17.

With the purchase of Dominion, Washington will take controlling interest in the Ekati mine and Dominion’s 40 per cent ownership of Diavik mine, both of which are located in the Northwest Territories. Washington has pledged to finance the development of both the Jay and Fox Deep projects to extend Ekati’s mine life until at least 2033.

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Washington said it plans to keep Dominion’s headquarters in Canada and maintain a “significantly Canadian” management team. It also promised to honour the existing commitments to the Indigenous communities around the mines and to provide ongoing support for local suppliers and contractors.

“The transaction allows the operation to take the next steps in mine development and ensures mining and its associated benefits continue in the North for decades to come,” said Dominion’s chair Jim Gowans in a release.

Washington made an unsolicited offer to Dominion in February, but discussions fell apart a month later when Dominion refused to agree to an exclusivity period, among other things, and Washington refused to commit to a standstill.

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The Washington Companies will pay US$14.25 per share, which represents a 44 per cent premium to Dominion’s stock price on March 15. This is an increase from their US$1.1 billion bid in March that offered US13.50 per share, a 35 per cent premium on the stock price.

Washington is a group of privately-owned North American mining, industrial and transportation businesses. Dominion will be the only diamond-mining company currently in its holdings. 

Dominion’s board of directors, with the support of financial and legal advisors as well as an independent special committee that analyzed the offer, unanimously voted in favour of Washington’s increased offer, but the agreement is still subject to shareholder approval. The sale is expected to close by the end of 2017.