Investing.com-- Pan American Silver Corp (NYSE: PAAS ) said on Sunday evening that it had entered a definitive agreement with MAG Silver Corp (TSX: MAG ) to buy the firm for about $2.1 billion in a cash and stock deal.

Pan American will offer $20.54 per MAG share, with the deal being a mix of $500 million in cash and 0.755 Pan American shares for each MAG share.

The $20.54 figure represents a 21% premium to MAG’s close on Friday.

Pan American said the deal was aimed at acquiring MAG’s 44% stake in the Juanicipio silver mine in Mexico, which it operates through a joint venture with Fresnillo (LON: FRES ).

Pan American also flagged growth opportunities at the mine, along with MAG’s Deer Trail and Larder properties.

MAG said the deal represented a “compelling opportunity” for shareholders.

The deal comes against the backdrop of a recent run-up in silver prices , which benefits major miners. Consolidation is also expected to help the silver mining industry take better advantage of higher prices.