Canadian miner Barrick Gold Corp on Friday said that it is weighing a mammoth bid for US rival Newmont Mining Corp to reclaim its dominance in the gold sector.
In a statement, the company said it had “reviewed the opportunity to merge with Newmont Mining Corp,” but added that “no decision” had been made yet.
Newmont has not commented on the proposed transaction. If it goes ahead, the US$19 billion hostile takeover would top the previous record deal, set only last month after years of waning investor interest due to lackluster bullion prices.
The industry has been consolidating as gold mines around the world get depleted, driving up costs and encouraging companies to come together in mergers and alliances.
Last month, Colorado-based Newmont announced a US$10 billion stock deal for another Canadian mining company, Vancouver-based Goldcorp Inc, in a move to leapfrog Barrick as top gold miner.
That acquisition — which is expected to close in the second quarter — came only three months after Barrick agreed to buy Britain’s Randgold Resources Ltd in a US$5.4 billion deal.
However, unlike past waves of mergers and acquisitions in the sector that saw big premiums being offered, but turned out to be disastrous and burdened buyers with huge debts, Barrick lowered the bar in the Randgold deal.
Barrick and Newmont flirted with the idea of merging five years ago, but talks fell apart over who would lead the combined firm and where to locate its headquarters — Toronto or Denver, Colorado.
Barrick’s renewed interest in its rival shows that it does not want to cede its gold crown.
However, observers said that its offer of a one-for-one share exchange at no premium might have to be sweetened to entice Newmont shareholders.
It could also complicate Newmont’s purchase of Goldcorp or even scuttle the deal, which would put Barrick on the hook for a huge break fee payable to Goldcorp.
Under the terms, Barrick would reportedly keep the bulk of Newmont’s assets including mines in Nevada and African countries, while its Australian assets would be sold to Newcrest Mining Ltd or another buyer, unnamed sources were cited as sayinf by the Globe and Mail newspaper.
Newcrest, which is largely focused on the Pacific Rim, itself last year walked away from talks to merge with Goldcorp, but it is said to be looking for new buying opportunities.
The Barrick-Newmont tie-up — which long eluded late Barrick founder and chairman Peter Munk — would produce more than 10 million ounces of gold a year, BMO Capital Markets said in an estimate.
The two companies have adjoining assets in Nevada and Newmont already has a stake in Barrick’s Turquoise Ridge Mine in the US state.
Their combined market capitalization would top US$40 billion.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
BIG BUCKS: Chairman Wei is expected to receive NT$34.12 million on a proposed NT$5 cash dividend plan, while the National Development Fund would get NT$8.27 billion Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday announced that its board of directors approved US$15.25 billion in capital appropriations for long-term expansion to meet growing demand. The funds are to be used for installing advanced technology and packaging capacity, expanding mature and specialty technology, and constructing fabs with facility systems, TSMC said in a statement. The board also approved a proposal to distribute a NT$5 cash dividend per share, based on first-quarter earnings per share of NT$13.94, it said. That surpasses the NT$4.50 dividend for the fourth quarter of last year. TSMC has said that while it is eager
‘IMMENSE SWAY’: The top 50 companies, based on market cap, shape everything from technology to consumer trends, advisory firm Visual Capitalist said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was ranked the 10th-most valuable company globally this year, market information advisory firm Visual Capitalist said. TSMC sat on a market cap of about US$915 billion as of Monday last week, making it the 10th-most valuable company in the world and No. 1 in Asia, the publisher said in its “50 Most Valuable Companies in the World” list. Visual Capitalist described TSMC as the world’s largest dedicated semiconductor foundry operator that rolls out chips for major tech names such as US consumer electronics brand Apple Inc, and artificial intelligence (AI) chip designers Nvidia Corp and Advanced
RSS