Barrick proposes a merger of all shares with Newmont

(Kitco News) – Barrick Gold Corp. (NYSE: GOLD, TSX: ABX) proposed to buy Newmont Mining Corp. (New York Stock Exchange: NEM) in a transaction involving all shares, announced Monday Barrick.

The reports estimate the value of the proposed acquisition at about $ 18 billion.

This operation would bring together the two largest gold producers in the world. The news came after recent news reports announced that Barrick was aiming to buy Newmont, which analysts say was a sign of further consolidation of the precious metals sector.

Barrick submitted that the acquisition would unlock synergies of $ 7 billion net present value (pre-tax), largely due to the combination of the company's assets in Nevada. This proposal follows Randy Barrick's acquisition of Randgold Resources Ltd. and the agreement between Newmont and Goldcorp Inc.

Under Barrick's proposal, each Newmont shareholder would receive 2.5694 Barrick shares per Newmont share, representing a market transaction based on Barrick's and Newmont's weighted average share prices on the New York Stock Exchange. York during the 20 trading sessions. it ended on Wednesday. It was the last trading day before the announcement of the news of the transaction in the financial press. Barrick shareholders would own 55.9% of the amalgamated company and Newmont shareholders would own 44.1%.

"The combination of Barrick and Newmont will clearly create what is clearly the best gold company in the world, with the largest portfolio of leading gold assets and the highest level of free cash flow available for future growth and support. sustainable returns for shareholders, managed by a manager. team with unparalleled experience in value creation, "said Mark Bristow, former president and CEO of Randgold, who became president and chief executive officer of Barrick.

Bristow said a Barrick-Newmont contract was long overdue and would be superior to Newmont's proposed acquisition of Goldcorp, arguing that Barrick-Newmont's annual synergies were 7.5 times higher than the annual listed synergies for the Newmont-Goldcorp transaction.

"More importantly, it will allow us to consider our Nevada assets as one complex, which will enable better planning of mines and take full advantage of the enormous geological potential of this state for all stakeholders," he said. said Bristow.

"Taken together, the merger represents a dramatic and expected restructuring of the gold industry and a shift from short-term survival tactics to long-term sustainable value creation."

In the event of a merger with Newmont, the teams of both companies would review the combined portfolio using strategic filters to retain the industry's best production, project and exploration assets, Barrick said.

Barrick stated that the amalgamated company intended to achieve Newmont's annual 56 cents per share dividend. Based on the proposed exchange ratio, this would represent a pro forma annual dividend of 22 cents per Barrick share, compared to the current annual dividend of 16 cents.