Newmont closes in on $10 billion acquisition of Goldcorp

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Mining giants Newmont and Goldcorp have entered into an agreement that will result in the former acquiring all shares of the latter in a stock-for-stock transaction valued at $10 billion.

Per details of the deal, Newmont will acquire each Goldcorp share for 0.3280 of a Newmont share, which represents a 17% premium based on the companies’ 20-day volume weighted average share prices.

The transaction will merge two gold industry leaders into Newmont Goldcorp, creating an unmatched portfolio of operations, projects, exploration opportunities, reserves and people in the gold mining sector, the parties said in a statement on Monday.

Goldcorp President and CEO David Garofalo is hopeful that the combination would create the world’s premier gold company.

Newmont anticipated that the merged company would offer the highest yearly dividend among senior gold producers globally.

“We have a proven strategy and disciplined implementation plan to realise the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six- to seven-million ounces over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline,” said Newmont CEO Gary Goldberg.

He added that the company cultures were well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance.

“We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven full potential continuous improvement program. The combination is expected to be immediately accretive to Newmont’s net asset value and cash flow per share,” Mr. Goldberg added.

Newmont anticipated that the merged company would offer the highest yearly dividend among senior gold producers globally.

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