SYDNEY (AFP) – Australian mining company Newcrest said yesterday it had agreed to a takeover by United States (US) rival Newmont, creating a world-leading gold producer in a deal worth AUD28.8 billion (USD19 billion).
By swallowing up Newcrest, the US mining giant will cement its position as the world’s biggest gold producer, with operations extending across North and South America, Africa, Australia and Papua New Guinea.
Newcrest’s shareholders will receive 0.4 of the US firm’s shares for each Newcrest share, giving them 31 per cent of the combined group, the Australian firm said.
The takeover, expected to be completed by the end of 2023, has a value of AUD28.8 billion, it said.
“The combined group will set a new benchmark in gold production while benefitting from a material and growing exposure to copper and a market-leading position in safety and sustainability,” Newcrest chairman Peter Tomsett said in a statement.
Newcrest had “unanimously” recommended the takeover offer to shareholders, he said, three months after its board rejected an earlier USD17 billion approach as too cheap.
“It’s a fantastic opportunity for Newmont because they’re going to be acquiring some very good assets at what I consider to be an attractive price,” said mining equity analyst at financial services firm Barrenjoey Daniel Morgan.
The takeover still needs approval from Newcrest shareholders at a meeting expected in September or October, and agreement from competition authorities in Australia, Canada and Papua New Guinea.
It is unlikely to face serious competition challenges, Morgan said.
“Even though it is going to create the world’s largest gold miner, it is not going to lead to consolidation in any sense that is going to be harmful for consumers,” he told AFP.
