Toronto-based Barrick Gold Corp. has tabled a US$18-billion offer to merge with American gold giant Newmont Mining Corp.
The offer is conditional on Newmont dropping its US$10-billion acquisition of Vancouver-based Goldcorp Inc., the world’s third-largest gold producer by market value.
Barrick’s president and CEO, Mark Bristow, told investors today (February 25) the deal would create the world’s best gold company and unlock more than $7 billion in pre-tax synergies.
“Considered globally, the merger represents a radical and long-overdue restructuring of the gold industry, and a transformative shift from short-term survival tactics to the long-term creation of sustainable value,” stated Bristow in a release.
Newmont said Monday the creation of Newmont Goldcorp represents the best opportunity to create value for shareholders.
The company has previously reviewed and rejected potential combinations with Barrick as well as Randgold Resources Ltd., which was acquired by the former in a US$18.3-billion deal that completed at the start of 2019.
Barrick’s all-stock proposal does not value Newmont shares at a premium. Barrick shareholders would own 55.9% of the combined company.
Bristow called the deal “far superior” to Newmont’s acquisition of Goldcorp, and one that would result in annual synergies 7.5 times larger.
Newmont has said Barrick’s proposal ignores risks and overstates rewards. It will review the deal and respond in due course.
