Newmont grabs Goldcorp in $10B deal that creates world's top gold miner

Postado Janeiro 14, 2019

Newmont Mining, the giant Colorado-based gold miner, said Monday it would buy Canadian rival Goldcorp for $10 billion in a stock-for-stock transaction.

The deal is the second high-profile merger in the mining industry since Barrick Gold Corp agreed to buy Randgold Resources Ltd in September a year ago to cut costs.

Goldcorp shares surged in USA pre-market trading, climbing 11% to $10.71 as of 7:29 NY.

Newmont and Goldcorp were "clearly not willing to sit back and let Barrick take the limelight", said Kieron Hodgson, a natural resources analyst at Panmure Gordon in London.

Goldcorp shareholders will receive 0.328 of a Newmont share for their stock.

This is the second huge M&A deal in the global gold sector in the past few months.

Newmont will pay 0.3280 of its own shares for each Goldcorp share, a premium of 17% to the weighted average share price from the last 20 days.

Goldcorp president and CEO David Garofalo said Newmont Goldcorp will be one of Canada's largest gold producers, with a North American regional office in Vancouver that will oversee more than three million ounces of gold production. In 2017, Newmont produced 5.3 million ounces of gold, while Goldcorp mined 2.6 million ounces.

And at about US$10 billion, the transaction will rival Barrick's purchase of Placer Dome the gold-industry's biggest takeover. That deal had a final value of about $9.9 billion when it closed in 2006, according to data compiled by Bloomberg.

NewmontGoldcorp said they will sell up to US$1.5 billion in assets over the next two 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. Additionally, the two big deals will add pressure to other gold miners such as Kinross Gold Corp. and AngloGold Ashanti Ltd., which have missed out on the sudden deal rush.

The new gold miner will be led by Newmont's Chief Executive Officer Gary Goldberg, who is retiring by the end of the year.