US gold miner, Newmont makes $19.5b offer to buy Australian rival Newcrest Mining

Newmont, the Denver-based US mining company has made a bid offer to purchase Australian rival Newcrest Mining, according to news reports.

Newmont, which has mines in Ghana has made a bid to buy Newcrest for an amount of $19.5 billion, described as a ‘mega bid’ in the industry.

The reports say, Newmont first made the approach with a bid amounting to about $17 billion, making the latest bid 16 per cent higher than the initial proposal, and represents around a 46 per cent premium to Newcrest’s share price on February 3 before Newmont’s first bid was announced.

Newmont said yesterday April 11, 2023 in a press statement that the proposal to combine with Newcrest is on the basis of 0.380 Newmont shares per Newcrest share, which would result in the combined company being 30 per cent owned by Newcrest and 70 per cent owned by Newmont.

Newmont’s President and CEO, Tom Palmer was quoted as saying; “We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce and the communities in which we operate.”

“The proposed transaction would join industry-leading portfolios of assets and projects to create long-term value across the combined global business, and we welcome the consideration of Newcrest’s Board of Directors,” he said.

He added: “This transaction would strengthen our position as the world’s leading gold company by joining two of the sector’s top senior gold producers and setting the new standard in safe, profitable and responsible mining. Together as the clear gold-mining leader, we would be well-positioned to generate strong, stable and lasting returns with best-in-class sustainability performance for decades to come.”

Newcrest has confirmed the new sweetened bid.

“I think this offer strikes a better balance. We are positively disposed to the Newcrest-Newmont merger and would intend to remain a shareholder of the combined entity were a transaction to proceed,” Simon Mahwinney, chief investment officer at Newcrest’s top shareholder Allan Gray Australia, told the Reuters news agency.

If this deal is approved by regulators, Newmont would be owning four of Australia’s largest mines.

Newmont first entered Australia in 2002 with the acquisition of Normandy Mining. The US miner later bought Boddington and Tanami.

By Emmanuel K Dogbevi

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