Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Newmont to Buy Goldcorp in $10 Billion Mega Gold Mining Deal

Published 01/14/2019, 05:46 AM
Updated 01/14/2019, 06:00 AM
© Bloomberg. Gold bars sit in a vault at the Perth Mint Refinery, operated by Gold Corp., in Perth, Australia, on Thursday, Aug. 9, 2018.

© Bloomberg. Gold bars sit in a vault at the Perth Mint Refinery, operated by Gold Corp., in Perth, Australia, on Thursday, Aug. 9, 2018.

(Bloomberg) -- Newmont Mining Corp (NYSE:NEM). will buy rival Goldcorp Inc. in a deal valued at $10 billion, creating the world’s largest gold miner and cementing a return of M&A to the industry.

The transaction comes just three months after another blockbuster gold deal when Barrick Gold Corp. agreed to acquire Randgold Resources (LON:RRS) Ltd. in a $5.4 billion transaction. Today’s deal creates a miner that exceeds Barrick-Randgold in scale, producing about 7.9 million ounces of gold a year.

“This combination will create the world’s leading gold business,” said Gary Goldberg, Newmont’s chief executive officer.

Goldcorp shares surged in U.S. pre-market trading, climbing 13 percent to $10.92 as of 5:42 a.m. in New York.

Newmont will pay 0.3280 of its own shares for each Goldcorp share, a premium of 17 percent to the weighted average share price of the companies over the last 20 days. Newmont also plans to pay 2 cents for each Goldcorp share.

Goldberg, who has lead Newmont since 2013, will remain CEO until the deal and integration of the two companies is complete -- likely in the fourth quarter -- after which he will hand over to Chief Operating Officer Tom Palmer.

The new company plans sell up to $1.5 billion in assets over the next 2 years, echoing a similar Barrick pledge to concentrate on the best-performing mines. Newmont also promised initial cost savings from the merger of $100 million a year.

Newmont has retained BMO Capital Markets, Citi and Goldman Sachs (NYSE:GS) as financial advisors, while Goldcorp has TD Securities and BofA Merrill Lynch.

© Bloomberg. Gold bars sit in a vault at the Perth Mint Refinery, operated by Gold Corp., in Perth, Australia, on Thursday, Aug. 9, 2018.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.