NYSE-listed Newmont Mining Corporation and NYSE- and TSX-listed Goldcorp have entered into a definitive agreement that will result in Newmont acquiring all shares of Goldcorp in a stock-for-stock transaction valued at $10-billion.
Newmont will acquire each Goldcorp share for 0.3280 of a Newmont share, which represents a 17% premium based on the companies’ 20-day volume weighted average share prices.
The transaction will combine two gold industry leaders into Newmont Goldcorp, creating an unmatched portfolio of operations, projects, exploration opportunities, reserves and people in the gold mining sector, the parties said in a statement on Monday.
Goldcorp president and CEO David Garofalo said the combination would create the world’s premier gold company.
Newmont anticipated that the merged company would offer the highest yearly dividend among senior gold producers globally.
“We have a proven strategy and disciplined implementation plan to realise the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six- to seven-million ounces over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline,” said Newmont CEO Gary Goldberg.
He added that the company cultures were well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance.
“We expect to generate up to $100-million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven full potential continuous improvement program. The combination is expected to be immediately accretive to Newmont’s net asset value and cash flow per share,” Goldberg said.
Newmont Goldcorp’s management team will be appointed on a “best talent” basis, with Goldberg as CEO and Tom Palmer as president and COO.
As part of a planned and orderly leadership succession process, Goldberg and Newmont’s board have been engaging in discussions anticipating a CEO succession early in 2019.
Newmont Goldcorp’s board of directors will be proportionally comprised of Newmont and Goldcorp directors, with Noreen Doyle to be appointed chairperson and Ian Telfer deputy chairperson.
Newmont Goldcorp’s shares will trade on the NYSE and will follow on the TSX after the transaction.
Newmont currently operates two projects in Ghana, three in Australia, three in North America and two in South America, while Goldcorp operates six projects in North America and one in South America. Both companies have varying stakes in exploration or development projects across North and South America.
This transaction follows hot on the heels of the merger between two other large gold miners, Barrick Gold and Randgold Resources.