IGO has confirmed it is in discussions with fellow nickel miner Western Areas over a potential takeover worth more than $800 million.
Western Areas, which owns the Forrestania nickel operations near Kalgoorlie, rose 12 per cent on the news to trade at $2.78 per share, as at 12pm AEST.
That implies a current market capitalisation of about $798 million.
IGO, which operates the Nova nickel-copper-cobalt mine in the Fraser Range, has a current market cap of $7.2 billion. Its shares were down 5.4 per cent to trade at $9.
Both parties will begin their due diligence on the potential transaction.
Western Areas’ Forrestania operations include the Flying Fox and Spotted Quoll mines.
The company is also developing the $299 million Odysseus mine, which forms part of the larger Cosmos project, located near Leinster.
The deal comes amid a flurry of merger and acquisition activity on the ASX.
Two big WA-linked deals in recent weeks were in oil and gas.
Woodside announced a $20 billion merger of BHP's petroleum business, which would create a $40 billion entity.
Oil Search agreed to a $13 billion proposal from Adelaide-based Santos earlier this month.
On the east coast, Sydney Airport recieved a $22 billion takeover bid from a consortium led by IFM Investors.
IGO has also been active.
The company recently closed the Tianqi Lithium deal, which was announced in December, taking a 49 per cent stake in the previously fully-Chinese-owned miner.
The $1.9 billion deal meant IGO now owns 24.5 per cent of the Greenbushes lithium mine, and 49 per cent in the Kwinana lithium hydroxide refinery.
IGO also sold its 30 per cent stake in the Tropicana gold mine to Regis Resources in April.