Newmont to buy Goldcorp as mergers return to gold industry
Newmont will pay 0.3280 of its own shares for each Goldcorp share, a premium of 17% to the weighted average share price from the last 20 days
Newmont Mining will buy rival Goldcorp in a deal valued at $10bn, creating the world’s largest gold miner and cementing a return of mergers and acquisitions to the industry. The transaction comes just three months after Barrick Gold’s move to buy Randgold Resources in a $5.4bn transaction, which instantly spurred speculation that rivals would have to respond. Goldcorp shares surged in US pre-market trading, climbing 13% to $10.96 as of 6.25am in New York. Newmont shares slipped 3%. The two huge gold deals have the potential to spark investor interest after the industry lost favour following years of lackluster bullion prices, bad investments and disastrous deals. Just two weeks ago, Mark Bristow, the new CEO of Barrick, said the industry was heading for irrelevance unless there were major changes. Newmont and Goldcorp were “clearly not willing to sit back and let Barrick take the limelight”, said Kieron Hodgson, a natural resources analyst at Panmure Gordon in London. Newmont will p...
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