Newmont Corp has offered to buy Australia’s Newcrest Mining Ltd in a US$17 billion deal that would strengthen the US mining powerhouse’s position in copper and gold.
The takeover, if completed, would be the largest globally so far this year and one of the biggest in Australian history, data compiled by Bloomberg showed.
The proposed deal comes as gold prices have been consistently strong since 2020, and have rallied about 15 percent since early November last year.
Photo: REUTERS
It would also increase Newmont’s footprint in copper, which is becoming more sought after due to its use in renewable energy and electric vehicles as economies decarbonize.
Newmont confirmed that it made the offer in a statement late on Sunday in Denver, Colorado, where it is headquartered, saying the deal “presents a powerful value proposition” to both businesses.
One of the world’s biggest gold miners, with a market value of about US$40 billion, Newmont made an earlier lower bid for Newcrest that its board rejected.
“The strong Australian dollar, gold prices and declining global reserves suggest more acquisitions are likely, particularly for businesses like Newcrest, which has significant copper exposure,” Bloomberg Intelligence industry analyst Mohsen Crofts said in a note yesterday.
Newcrest derives the majority of its revenue from gold, and the rest from silver and copper, with mines in Australia, Canada and Papua New Guinea.
The company plans to ramp up the copper component to take advantage of the expected surge in demand, Newcrest acting chief executive officer Sherry Duhe said.
Under the proposed deal, shareholders would receive 0.38 Newmont shares for each Newcrest share held, equivalent to A$27.16 per share or a 21 percent premium to Friday’s close, the Melbourne-based miner said in a regulatory filing yesterday.
The board is considering the proposal, which is conditional on Newmont being granted exclusive due diligence, Newcrest said.
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