Newmont claimed that the proposed deal with Newcrest Mining, which has operating mines in Australia, Canada, and Papua New Guinea, will be executed via a scheme of arrangement, with an intent to combine two of the leading senior gold producers in the sector
Newmont proposes to acquire rival gold miner Newcrest Mining in an all-stock deal. (Credit: István Mihály from Pixabay)
Australia-based Newcrest Mining has confirmed receipt of a sweetened bid of A$27.16 ($18.82) per share from rival gold mining company Newmont for its takeover by the latter in an all-stock deal worth $16.9bn.
Newmont claimed that the proposed deal, which will be executed via a scheme of arrangement, will combine two of the leading senior gold producers in the sector.
Newcrest Mining has operating mines in Australia, Canada, and Papua New Guinea. On the other hand, Newmont’s portfolio of assets and prospects is anchored in mining jurisdictions in North America, Australia, South America, and Africa.
As per the conditional and non-binding indicative proposal, shareholders of Newcrest Mining will exchange each of their shares in the company for 0.38 shares of the US-based Newmont.
In the combined company, Newcrest Mining’s shareholders will hold a 30% stake, while the remaining 70% will be owned by Newmont’s shareholders.
Newcrest Mining said that its board along with its financial and legal advisers is considering the indicative proposal.
According to the Australian miner, the indicative proposal represents a premium of 21% to its closing price of A$22.45 ($15.5) per share on 3 February 2023.
Newmont president and CEO Tom Palmer said: “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.”
Newcrest Mining revealed that previously it received an indicative, non-binding, and conditional acquisition proposal from Newmont at an exchange ratio of 0.363 of the latter’s shares for each Newcrest Mining share.
The former’s board concluded that the earlier proposal from Newcrest Mining would not generate adequate compelling value to the company’s shareholders and on that basis, turned down the previous proposal.
The latest indicative proposal from Newmont is subject to various conditions. These include granting exclusivity to the company, due diligence, its shareholder approval, and various regulatory approvals in Australia and the US.