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South African miner Gold Fields has denied the rumor that he wants to merge with his biggest rival, AngloGold Ashanti, a short story that has boosted his shares by more than 7%.
Bloomberg reported Tuesday that the Johannesburg-based gold mine was interested in a rapprochement since the two companies "operate in a similar jurisdiction and share a common philosophy".
However, Gold Fields said that the story was "factually incorrect and we completely dissociate ourselves from this statement". AngloGold declined to comment.
An agreement between Gold Fields and AngloGold would have been the latest in a wave of consolidation in the gold sector, following Barrick Gold's recent merger with Randgold and Newmont Mining with Goldcorp.
The agreement would have created a company with a market value of $ 8 billion and a production of 6 million ounces of gold per year, in line with the amount of the Newmont and Goldcorp combination.
Kelvin Dushnisky, Chief Executive Officer of AngloGold, will review the strategy as the company releases its annual results next month. Analysts do not expect any significant change from previously announced plans, although Mr Dushnisky can talk about badet sale and exploration projects.
Since taking over the reins of AngloGold in the fall, it seems that the company is seeking to divest its South African badets and resell its shares in London.
AngloGold generates more than 90% of its revenues in continental Africa, Australia and the Americas. South Africa now represents a small part of its business, contributing about 7% to its profitability.
However, bankers believe that such an agreement would be difficult to conclude with imminent elections in South Africa and that the president of the country, Cyril Ramaphosa, seeks to stimulate foreign direct investment.
In a recent report, RBC badysts said they did not expect mergers and acquisitions to be high on the agenda of either management team, even if they should think seriously about their scale and relevance in a growing industry.
"Both companies could wait to see what badets were released by Barrick and Newmont-Goldcorp before taking action. We are not making any changes to target prices or estimates today, "RBC said.
Shares in Gold Fields, which climbed 7.6%, edged down to 3.9% following the release of the statement. AngloGold is trading 2.4% more after increasing 3.5% previously.
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