Last Update: May 15, 2023, 06:07 AM IST
Shareholders of Melbourne-based Newcrest will receive 0.4 shares of the US firm for every one they currently hold. (Representative Image/AP)
By swallowing Newcrest, US mining conglomerate expands its large gold and copper mining assets
Australian mining company Newcrest said on Monday it had agreed to be acquired by US rival Newmont, creating a world-leading gold producer in a deal worth 28.8 billion Australian dollars (US$19 billion).
By swallowing Newcrest, the US mining conglomerate expands its large gold and copper mining assets, giving it a global reach across North and South America, Africa, Australia and Papua New Guinea.
The Australian firm said shareholders of Melbourne-based Newcrest would receive 0.4 shares of the US firm for each they currently hold, giving them 31 per cent of the combined group.
The implied value of the deal is 28.8 billion Australian dollars.
“The combined group will set a new benchmark in gold production, while benefiting from the material’s increased exposure to copper and its market-leading position in safety and stability,” Peter Tomset, president of Newcrest, said in a statement.
Newcrest had “unanimously” recommended the acquisition offer, three months after its board rejected an earlier $17 billion approach for not providing “substantial value” to shareholders, he said.
Newmont chief executive Tom Palmer said the combined group has created an industry-leading portfolio with a “multi-decade gold and copper production profile” in the world’s most favorable mining jurisdiction.
“We have identified several opportunities to unlock substantial value and apply our experience and expertise to Newcrest’s complementary and exceptional portfolio of long-lasting, low-cost gold and copper assets,” he said in a statement. do.”
Denver-based Newmont said the acquisition is expected to deliver US$500 million in annualized synergies and generate an estimated US$2 billion in cash flow as a result.
“This transaction also increases Newmont’s annual copper production – a critical metal for the new energy economy – and adds approximately 50 billion pounds of copper reserves and resources from Newcrest to our strong and balanced portfolio,” Palmer said. “
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
