Newmont Corporation sweetened its offer by submitting a final revised takeover offer to Australia’s largest listed gold miner Newcrest Mining Limited (ASX:NCM), bidding a 46% premium to the closing price of Newcrest shares as on February 3, 2023.
The latest offer values Newcrest Mining at $19.5 billion, which would make it the largest-ever M&A deal in the gold-mining industry, if successful, noted The Wall Street Journal.
Newmont’s decision to improve its all-stock offer for Newcrest comes at a time when gold prices are hovering around the $2,000 mark after a pullback from fresh yearly highs last week amid serious recession worries over the economy.
Denver, Colorado-based Newmont previously had an around $17 billion bid rebuffed by Newcrest.
Newmont is now offering 0.400 of its own shares for each Newcrest share, the company said. In addition, Newcrest said it is permitted to pay a special dividend of up to $1.10 a share around the time any deal gets completed.
After assessing the latest proposal, Newcrest said it would open its books to Newmont to firm up a binding offer.
“This transaction would strengthen our position as the world’s leading gold company by joining two of the sector’s top senior gold producers and setting the new standard in safe, profitable and responsible mining,” Newmont CEO Tom Palmer said in a statement.
“Together as the clear gold-mining leader, we would be well-positioned to generate strong, stable and lasting returns with best-in-class sustainability performance for decades to come,” he added.
Meanwhile, Newmont said that if the deal went through it would boost its portfolio by increasing annual copper production and adding "nearly 50 billion pounds of copper reserves and resources" to its diverse asset base.
The combined group is expected to deliver significant annual synergies and create long-term value for all stakeholders.
In 2019, Newmont acquired Canadian gold producer Goldcorp Inc in a transaction valued at $10 billion. Newmont pointed out that the Goldcorp acquisition delivered annual synergies of more than $1 billion.
Under the terms of the final proposal, Newcrest shareholders would own approximately 31% of the combined company.
Newmont is a leading gold company and a producer of copper, silver, zinc and lead. It has a portfolio of assets, prospects and talent anchored in favorable mining jurisdictions in North America, South America, Australia and Africa. Newmont is the only gold producer listed on the S&P 500 Index.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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