Newmont has submitted a non-binding proposal to acquire 100% of Newcrest Mining by way of a scheme of arrangement in a proposed transaction that, it says, would combine two of the sector’s top senior gold producers, and set the standard for sustainable and responsible gold mining.
Newmont’s proposal to combine with Newcrest is on the basis of 0.380 Newmont shares per Newcrest share, which would result in the combined company being 30% owned by Newcrest and 70% owned by Newmont. This $16.9 billion offer is at a 21% premium to the share price of Newcrest prior to the announced bid.
It follows the prior receipt of an indicative, non-binding and conditional proposal from Newmont to acquire Newcrest at an exchange ratio of 0.363 Newmont shares for each Newcrest share, Newcrest said.
Newcrest produced 1.9 Moz of gold and 121,000 t of copper in its 2022 financial year, while Newmont’s 2022 full-year guidance was 6 Moz of attributable gold production.
Newmont, already the world’s biggest gold miner by production, said: “This represents a compelling opportunity for the shareholders of both companies to share in the upside of putting together two complementary businesses.”
Tom Palmer, President and CEO of Newmont, said: “We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce and the communities in which we operate. The proposed transaction would join industry-leading portfolios of assets and projects to create long-term value across the combined global business, and we welcome the consideration of Newcrest’s Board of Directors.”
Newmont’s proposal is subject to certain customary conditions, including due diligence to the satisfaction of both parties, entry into a scheme implementation agreement and a recommendation from the Newcrest Board of Directors that Newcrest shareholders vote in favour of the proposal.