Newmont Mining and Canadian gold producer Goldcorp sign $10bn merger

Newmont acquisition of Goldcorp : American mining company Newmont Mining has signed a $10 billion worth stock-to-stock deal to acquire Canadian gold production company Goldcorp, as per the latest mining acquisition news.

The combined entity with an enterprise value of $12.5 billion, following the merger will be called Newmont Goldcorp, which is expected to be the world’s largest gold mining company with potential production of 6-7 million ounces through a decades-long time horizon.

Newmont Goldcorp will be based in Denver, Colorado with a project pipeline spanning four continents. The enlarged gold mining company will operate in the mining regions in the Americas, Australia, and Ghana.

Newmont acquisition of Goldcorp : Newmont Mining and Goldcorp sign $10bn merger. Photo courtesy of Plazak at English Wikipedia.

David Garofalo – Goldcorp President and CEO, commenting on Newmont acquisition of Goldcorp, said: “In addition to the depth and quality of Newmont Goldcorp’s operations, projects, exploration properties and Reserves, the combined company’s assets will be centered in the world’s most favorable and prospective mining jurisdictions and gold districts.

“The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels, and both teams are fully committed to delivering on the transaction’s value proposition for all of our stakeholders. Newmont Goldcorp will be one of Canada‘s largest gold producers and will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production.”

Newmont Goldcorp proposes to give priority to project development by means of returns and risk while aiming $1.0-1.5 billion in divestitures.

Commenting on Newmont acquisition of Goldcorp, Gary Goldberg – CEO of Newmont, said: “Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance. We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven Full Potential continuous improvement program.

“The combination is expected to be immediately accretive to Newmont’s net asset value and cash flow per share. We constantly review opportunities to raise our performance, and this combination represents the most promising path to deliver superior and sustainable value for our shareholders, employees, host countries and communities.”

According to the terms of the Newmont acquisition of Goldcorp, the American mining company will acquire each share of the Canadian gold production company for 0.3280 of its own shares along with a payment of $0.02 cents per share.

Current shareholders of Newmont Mining will own 65% while that of Goldcorp will own 35% in Newmont Goldcorp.

Newmont acquisition of Goldcorp has the approval of the boards of the two companies. Expected to be closed in Q2 2019, the merger is subject to regulatory approvals across Europe, Canada, Mexico, South Korea and other regions apart from meeting of other customary closing conditions.

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