Abu Dhabi, UAEMonday 20 May 2019

Newmont's $10bn purchase of Goldcorp to create world's biggest gold miner

Huge deal comes as M&A returns to the sector following Barrick's $5.4bn acquisition of Rangold in October

Mega deal will lead to the biggest miner of the yellow metal. Reuters
Mega deal will lead to the biggest miner of the yellow metal. Reuters

Newmont Mining will buy rival Goldcorp in a deal valued at $10 billion, creating the world’s largest gold miner and cementing a return of M&A to the industry.

The transaction comes just three months after another blockbuster gold deal when Barrick Gold agreed to acquire Randgold Resources in a $5.4bn transaction. Today’s deal creates a miner that exceeds Barrick-Randgold in scale, producing about 7.9 million ounces of gold a year.

“This combination will create the world’s leading gold business,” said Gary Goldberg, Newmont’s chief executive.

Goldcorp shares surged in US pre-market trading, climbing 13 per cent to $10.92 as of 5:42am in New York.

Newmont will pay 0.3280 of its own shares for each Goldcorp share, a premium of 17 per cent to the weighted average share price of the companies over the last 20 days. Newmont also plans to pay 2 cents for each Goldcorp share.

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Mr Goldberg, who has lead Newmont since 2013, will remain CEO until the deal and integration of the two companies is complete - likely in the fourth quarter - after which he will hand over to chief operating officer Tom Palmer.

The new company plans sell up to $1.5bn in assets over the next two years, echoing a similar Barrick pledge to concentrate on the best-performing mines. Newmont also promised initial cost savings from the merger of $100 million a year.

Newmont has retained BMO Capital Markets, Citi and Goldman Sachs as financial advisors, while Goldcorp has TD Securities and BofA Merrill Lynch.

Updated: January 14, 2019 03:29 PM

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