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ShreeMetalPrices: Gold Miner Newcrest agrees $19.2 billion buyout bid from Newmont


In order to establish the largest gold miner in the world, Newcrest Mining Ltd. And Newmont Corp have reached an acquisition agreement valued at approximately A$28.8 billion ($19.2 billion).

Investors in Newcrest would receive 0.4 Newmont shares for each Newcrest share they possess, giving them a 31 percent ownership stake in the combined company. The Melbourne-based company announced on Monday, confirming a story Sunday.

The agreement gives Newcrest an inferred enterprise value. Which takes into account net debt, of A$28.8 billion.

A special pre-completion dividend up to $1.10 per share, franked by Newcrest, will also be paid. According to Newcrest. It had already agreed to extend Newmont’s opportunity to do due diligence until May 18 after a previous deadline had passed.

“This merger will bring together two of the top gold producers in the world, creating significant value for Newcrest shareholder by the recognition of our great development pipeline,” said Peter Tomsett, chairman of Newcrest, in a statement.

The expanded Newmont will have gold holdings in Australia, Papua New Guinea, Africa, North and South America. Additionally, copper, a crucial metal in the transition to sustainable energy, will receive more exposure.

An agreement would likely be the culmination of a ferocious 5-year consolidation among the biggest gold miners in the world. Which started with Barrick Gold Corp.’s pursuit of Randgold Resources Ltd. for $18 billion and included a $5.2 billion acquisition of Yamana Gold Inc. That was finish in March.

The suggestion from Newmont comes just after the spot trade price of gold nearly reached an all-time high over concerns about global stagflation.

The first time Newmont approached its Australian rival was in February with a $17 billion non-binding offer that Newcrest’s board rejected. In April, the US corporation increased the sweetener to $19.5 billion and stated that it was the best & final offer. Sherry Duhe, the chief executive officer of Newcrest, stated. That the board would be willing to approve the offer to its shareholders if due diligence was effective.

Globally, gold miners are concerned about stagnant output, more difficult-to-mine resources. And growing input prices. More mergers & acquisitions are expect to occur as a result of these industry issues. As businesses look to grow in order to enhance production & achieve economies of scale.

Newmont is drawn to the Australian company not simply because of its five gold mines spread over three continents. But also because copper accounts for almost a quarter of its overall revenue.

Newmont, on the other hand, is struggling with a decade-long gold slump & has said it wanted more of the metal for the energy transition in its portfolio.