Newmont to Buy Goldcorp in $10 Billion Mega Gold Mining Deal

  • Bloomberg
  • Stock Market News
Newmont to Buy Goldcorp in $10 Billion Mega Gold Mining Deal
Credit: © Reuters.

(Bloomberg) -- Newmont Mining Corp (NYSE: NEM ). will buy rival Goldcorp Inc. in a deal valued at $10 billion, creating the world’s largest gold miner and cementing a return of M&A to the industry.

The transaction comes just three months after another blockbuster gold deal when Barrick Gold Corp. agreed to acquire Randgold Resources (LON: RRS ) Ltd. in a $5.4 billion transaction. Today’s deal creates a miner that exceeds Barrick-Randgold in scale, producing about 7.9 million ounces of gold a year.

“This combination will create the world’s leading gold business,” said Gary Goldberg, Newmont’s chief executive officer.

Goldcorp shares surged in U.S. pre-market trading, climbing 13 percent to $10.92 as of 5:42 a.m. in New York.

Newmont will pay 0.3280 of its own shares for each Goldcorp share, a premium of 17 percent to the weighted average share price of the companies over the last 20 days. Newmont also plans to pay 2 cents for each Goldcorp share.

Goldberg, who has lead Newmont since 2013, will remain CEO until the deal and integration of the two companies is complete -- likely in the fourth quarter -- after which he will hand over to Chief Operating Officer Tom Palmer.

The new company plans sell up to $1.5 billion in assets over the next 2 years, echoing a similar Barrick pledge to concentrate on the best-performing mines. Newmont also promised initial cost savings from the merger of $100 million a year.

Newmont has retained BMO Capital Markets, Citi and Goldman Sachs (NYSE: GS ) as financial advisors, while Goldcorp has TD Securities and BofA Merrill Lynch.

© Bloomberg. Gold bars sit in a vault at the Perth Mint Refinery, operated by Gold Corp., in Perth, Australia, on Thursday, Aug. 9, 2018.

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