Newcrest backs Newmont’s $17.8B bid.

Newcrest Mining Backs Newmont Corp’s $17.8 Billion Takeover Offer

Australian gold miner Newcrest Mining Ltd has announced its support for Newmont Corp’s A$26.2 billion ($17.8 billion) takeover offer, which could become one of the world’s largest buyouts this year.

If the deal is approved by Newcrest shareholders and regulatory authorities, it would increase Newmont’s gold output to almost double that of its closest competitor, Barrick Gold Corp, further cementing Newmont’s position as the world’s largest gold producer.

Under the terms of the deal, Newcrest shareholders would receive 0.400 Newmont share for each share held, with an implied value of A$29.27 a share, higher than a previous exchange ratio of 0.380 that Newcrest’s board rejected in February. Newmont is also offering a franked special dividend of up to $1.10 per share on the implementation of the deal.

The merger is set to be the third-largest deal ever involving an Australian company and the third-largest globally in 2023, according to data from Refinitiv and Reuters calculations.

“This transaction will combine two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline,” said Newcrest Chairman Peter Tomsett.

Newcrest shareholders will be able to choose to receive New York Stock Exchange-listed Newmont shares or Australian listed CHESS Depository Instruments (CDIs) as payment. Newcrest has recommended that its shareholders vote in favour of the deal at a meeting expected to be held in September or October.

The deal requires Australia’s Foreign Investment Review Board (FIRB) sign off as well as Newcrest and Newmont shareholders to vote in support the transaction among other regulatory approvals.

($1 = 1.4743 Australian dollars)

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