Monitoring Desk
MELBOURNE: Top US gold producer Newmont Corp. has offered a $17 billion deal to buy Australia’s Newcrest Mining Ltd, in a bid to strengthen its position in copper and gold.
If completed, the takeover would globally be the largest this year so far and one of the biggest in Australian history, said Bloomberg.
Newcrest’s share value surged to around 14% in early trading in Sydney, the highest since 2008.
The proposed deal comes as gold prices experienced a sustained period of strength since 2020 before rallying about 15% since early November.
Newmont confirmed offer
Newmont confirmed making the offer in a statement on late Sunday, saying the deal “presents a powerful value proposition” to both businesses. If finalised, the takeover would enhance Newmont’s footprint in copper, which has seen a heightened demand due to its use in the renewable energy sector and electric vehicles as economies move toward de-carbonisation.
Under the proposed agreement, shareholders would receive 0.38 Newmont shares for each of their Newcrest share, equivalent to A$27.16 a share or a 21% premium to Friday’s close, Newcrest said in a regulatory filing Monday.
The company said that the proposal was being considered by its board and was conditional on Newmont being given exclusive due diligence.
Melbourne-based most of its revenue from gold and the remaining from silver and copper. It has mines in Australia, Canada and Papua New Guinea. The company plans to increase the copper component to take advantage of the projected rise in demand, Sherry Duhe, Newcrest’s acting chief executive officer, said in November.
