US gold miner snaps up Australian rival in $19 billion deal

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.

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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.

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