Newcrest, an Australian mining corporation, announced Monday that it had agreed to be acquired by US rival Newmont, establishing a world-leading gold producer in a deal valued at Aus$28.8 billion (US$19 billion).
By acquiring Newcrest, the US mining behemoth would solidify its position as the world’s largest gold producer, with operations in North and South America, Africa, Australia, and Papua New Guinea.
According to the Australian corporation, Newcrest shareholders will receive 0.4 of the US firm’s shares for each Newcrest share, giving them 31% of the combined group.
The acquisition, which is planned to be completed by the end of 2023, has an implied value of Aus$28.8 billion, according to the company.
“The combined group will set a new gold production benchmark while benefiting 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.
Three months after its board rejected an initial US$17 billion bid as too low, Newcrest has “unanimously” approved the acquisition offer to shareholders, he added.
“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 Daniel Morgan, mining equity analyst at financial services firm Barrenjoey.
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.