Canada's Barrick Gold considers hostile $19 billion bid for Newmont Mining: media

February 22, 2019

https://www.reuters.com/article/us-newmont-mining-m-a-barrick-gold/barrick-gold-explores-19-billion-hostile-bid-for-newmont-mining-globe-and-mail-idUSKCN1QB0AN

When Barrick Gold announced that it was buying Randgold Resources in September 2018 for $6 billion rumors of a potential merger between Barrick Gold and Newmont Mining Corp. began almost immediately. However, Newmont did not merge with Barrick, instead, it acquired Goldcorp in January 2019 for $10 billion to become the world’s leading gold company.

And now, it appears that the mega mergers might not be over as there are multiple reports that Barrick is considering a hostile $19 billion bid for Newmont.

Canada’s Globe and Mail reported that Canadian-based Barrick said on Friday it had reviewed the possibility of a merger with rival Newmont in an all-stock transaction, but added that no decision had been taken so far.

Under the potential terms reported by the paper, Barrick would keep Newmont’s Nevada and African mines, while Newcrest was considering taking over its Australian operations.

Barrick has formed new management teams and cut administrative costs as part of new Chief Executive Mark Bristow’s plan to set the combined company firmly apart from peers.

Bristow had said on a post-earnings call that Barrick Gold would continue to look at opportunities for mergers or acquisitions.

If Barrick were to be successful, the merger between Newmont and Goldcorp would not go ahead, and Barrick would be liable for a $650 million break fee, the newspaper reported.

Newmont declined a request from Reuters for comment.

A Newcrest spokesperson said the firm did not comment on M&A speculation. Goldcorp was not immediately available for comment.

Newmont has three gold mines in Australia, which have a net present value of $4.5 billion according to AME Group, but none of those are seen as the kind of large ‘tier one’ developments that Newcrest has said are a prerequisite for any major buys.

 

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