NEW YORK, US – US-based Newmont Corporation, one of the world’s leading gold mining firms, made an offer Monday to buy out Australian rival Newcrest for about US$17 billion.
If the deal is sealed at the proposed sum, it would be the gold sector’s largest acquisition ever, after Newmont’s $10 billion takeover of Goldcorp, according to FactSet data.
Newmont’s offer calls for the merged firm to be 70 percent owned by the Denver, Colorado-based company and 30 percent owned by the Australian firm.
Newmont offered to pay $18.70 (A$27.16) per share – 21 percent higher than the closing price of Newcrest’s shares on the Australian Securities Exchange (ASX) on Friday.
Under the offer, Newmont shares held by Newcrest shareholders (0.38 Newmont shares for one Newcrest share) would also be listed on the Sydney-based exchange.
Newcrest’s share price rose 9.27 percent to $16.90 (A$24.53) on the ASX on Monday, remaining well below Newmont’s offer price.
Newcrest said its board of directors and financial and legal advisors were reviewing the offer.
The Melbourne-based company is in the midst of a transition after a December announcement that its CEO, Sandeep Biswas, was leaving the firm.
He has headed the company since 2014.
Newcrest, which operates mines in Australia, Canada and Papua New Guinea, saw its shares fall nearly 16 percent last year after recent earnings were deemed below market expectations.