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Last Updated: May 15, 2023, 06:07 IST
Melbourne-based Newcrest’s shareholders will receive 0.4 of the US firm’s shares for each one they currently own. (Representative image/AP)
By swallowing up Newcrest, the US mining group expands its large gold and copper mining assets
Australian mining company Newcrest said Monday it had agreed to a takeover by US rival Newmont, creating a world-leading gold producer in a deal worth Aus$28.8 billion (US$19 billion).
By swallowing up Newcrest, the US mining group expands its large gold and copper mining assets, giving it a global reach across North and South America, Africa, Australia and Papua New Guinea.
Melbourne-based Newcrest’s shareholders will receive 0.4 of the US firm’s shares for each one they currently own, giving them 31 percent of the combined group, the Australian firm said.
The deal has an implied value of Aus$28.8 billion, it said.
“The combined group will set a new benchmark in gold production while benefitting 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.
Newcrest had recommended the takeover offer “unanimously”, he said, three months after its board rejected an earlier US$17 billion approach for not providing “sufficient value” to shareholders.
Newmont chief executive Tom Palmer said the combined group created an industry-leading portfolio with a “multi-decade gold and copper production profile” in the world’s most favourable mining jurisdictions.
“We have identified a number of opportunities to unlock substantial value and will apply our experience and expertise to Newcrest’s complementary and exceptional portfolio of long-life, low-cost gold and copper assets,” he said in a statement.
Denver-based Newmont said it expected to deliver US$500 million in annual synergies and to generate an estimated US$2 billion in cash flow as a result of the takeover.
“This transaction also increases Newmont’s annual copper production — a metal vital for the new energy economy — and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio,” Palmer said.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
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