Newcrest supports Newmont’s $17.8 billion deal. Newcrest Mining Ltd., an Australian gold miner, backed Newmont Corp.’s (NEM.N) A$26.2 billion ($17.8 billion) takeover offer on Monday.
Newmont will surpass Freeport McMoRan (FCX.N) as the largest U.S. gold and copper producer by market capitalization if shareholders of both companies approve the deal.
Newcrest shareholders would receive 0.400 Newmont shares per share, with an implied value of A$29.27, up from the 0.380 exchange ratio rejected by Newcrest’s board in February.
Newcrest shares opened Monday 1.5% higher at A$28.68, a 30.4% premium to February’s price when the Newmont bid was announced.
Newmont will also let Newcrest pay a franked special dividend of up to $1.10 per share when the deal restores tax credits to Australian shareholders.
According to Refinitiv and Reuters, the merger will be Australia’s third-largest and the third-largest globally in 2023.
“This transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through recognition of our outstanding growth pipeline,” stated Newcrest Chairman Peter Tomsett.
After the transaction was finalized, Newmont said it would produce 8 million ounces of gold annually from 10 long-life, low-cost mines.
The Denver-based miner said Australia and Canada would produce 350 million pounds of copper annually.
Newcrest stockholders can obtain New York Stock Exchange-listed Newmont shares or Australian-listed CHESS Depository Instruments (CDIs).
Newcrest advised shareholders to approve the deal at a September or October meeting.
The agreement needs FIRB approval and Newcrest and Newmont shareholder approval. The firms announced the acquisition would close in the fourth quarter of 2023.
