Newcrest Mining accepts $19.2 billion Newmont takeover deal www.bloomberg.com
Newcrest Mining Ltd. has agreed to a takeover deal with Newmont Corp. worth about A$28.8 billion ($19.2 billion) to create the world’s biggest gold producer.
Newcrest shareholders will get 0.4 shares in Newmont for every Newcrest share they own, giving them 31% ownership of the combined group, the Melbourne-based company said Monday, confirming a Bloomberg News report Sunday.
The deal gives Newcrest an implied enterprise value of A$28.8 billion, which includes net debt.
Newcrest will also pay a franked special pre-completion dividend of up to $1.10 per share. Newcrest had earlier agreed to extend Newmont’s due-diligence rights to May 18 after an earlier deadline lapsed, it said Thursday.
“This transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline,” Newcrest’s chairman, Peter Tomsett, said in the statement.
The enlarged Newmont will have gold assets in North and South America, Africa, Australia and Papua New Guinea. It will also expand its exposure to copper, a key metal in the clean energy transition.
A deal would likely mark the apogee of a furious five-year consolidation among the world’s largest gold miners that began with Barrick Gold Corp.’s $18 billion pursuit of Randgold Resources Ltd. and includes a $5.2 billion takeover of Yamana Gold Inc. that was completed in March. Newmont’s proposal comes just weeks after the spot trading price of bullion approached an all-time record amid a global stagflation watch.
Newmont first approached its Australian rival in February with a $17 billion non-binding bid that was rejected by Newcrest’s board. The US company sweetened that in April to $19.5 billion, and described it as the best and final offer. Newcrest chief executive officer Sherry Duhe said the board was prepared to recommend the proposal to its shareholders, subject to successful due diligence.
Gold miners worldwide are facing the prospect of stagnating production, harder-to-mine deposits and rising input costs. Such industry challenges are seen as a catalyst for more mergers and acquisitions, as companies seek to increase size to boost production and improve efficiencies through economies of scale.
It’s not just Newcrest’s five gold mines across three continents that are attracting Newmont, as the Australian company generates around a quarter of its revenue from copper. Newmont, in turn, is facing a decade-long gold rut and has said it wants more of the energy-transition metal in its portfolio.
(By Harry Brumpton and Dinesh Nair, with assistance from Jason Scott)
Published Date:2023-05-15