By In a significant move, Australian gold miner Newcrest Mining Ltd announced its support for Newmont Corp’s A$26.2 billion ($17.8 billion) takeover offer, marking one of the largest buyouts this year. The deal, contingent upon approval from shareholders and regulatory authorities, would elevate Newmont’s gold output to nearly double that of its closest competitor, Barrick Gold Corp, securing its position as the leading US gold and copper producer by market capitalization.
Under the agreement, Newcrest shareholders will receive 0.400 Newmont share for each share held, implying a value of A$29.27 per share. This ratio surpasses the previous exchange ratio of 0.380, which Newcrest’s board had rejected back in February. The news prompted an increase in Newcrest shares by 1.5% to A$28.68 upon market opening, with the offer representing a 30.4% premium compared to the stock’s price in February before the public announcement of Newmont’s bid.
In a further show of goodwill, Newmont is allowing Newcrest to pay a special dividend of up to $1.10 per share upon the deal’s implementation, offering tax credits to Australian shareholders.
Once finalized, the merger will become the third-largest deal involving an Australian company in history and the third-largest global deal in 2023, as per calculations by Refinitiv and Reuters. Newcrest chairman Peter Tomsett emphasized the transaction’s significance, stating, “This transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline.”
Newmont anticipates achieving an annual combined gold production of approximately 8 million ounces post-merger, including over 5 million ounces from 10 long-life, cost-effective mines. Additionally, the Denver-based miner projects an annual copper production of approximately 350 million pounds from operations in Australia and Canada.
Newcrest shareholders will have the option to receive payment in the form of New York Stock Exchange-listed Newmont shares or Australian-listed CHESS Depository Instruments.
Newcrest has recommended that its shareholders vote in favor of the deal, with a meeting expected to be held in September or October. The transaction necessitates approval from Australia’s Foreign Investment