Newmont Corp made a provisional offer to acquire Australia’s top gold miner Newcrest Mining Ltd in what would be its biggest global acquisition so far this year.
The offer, which values Newcrest at around A$17 billion, would also be the largest in Australian history, according to data compiled by Bloomberg. Newcrest jumped as much as 14% in early trade, its most since 2008.
The Melbourne-based miner said in a regulatory filing on Monday that shareholders would receive 0.38 Newmont shares for each Newcrest share, which would amount to A$27.16 per share, or a 21% premium. Newcrest said the board is considering the proposal, which is subject to Newmont being given exclusive due diligence.
Denver-based Newmont, one of the world’s largest gold miners with a market cap of nearly $40 billion, had earlier offered an exchange ratio of 0.363, which was rejected by Newcrest’s board.
In September, Newmont delayed a decision on a major investment in Peru until the second half of 2024, citing Russia’s war in Ukraine, rising raw material prices, prolonged supply-chain disruptions and competitive labor markets. Spot gold is up nearly 15% while copper is up nearly 20% since the beginning of November.
“A strong Australian dollar, declining gold prices and global reserves suggest there is potential for more acquisitions, particularly for businesses like Newcrest,” Bloomberg Intelligence industry analyst Mohsen Crofts said in a report Monday.
The approach comes amid Newcrest’s search for a new chief executive following the resignation of Sandeep Biswas in December. Sherry Duhey, former chief financial officer of oil and gas producer Woodside Energy Group Ltd., is acting CEO until a permanent replacement is found.
Newcrest derives most of its revenue from gold, and the remainder from silver and copper, from mines in Australia, Canada and Papua New Guinea. The company plans to increase the copper component to take advantage of an expected jump in demand for the metal, which is a key material in renewable energy infrastructure and electric vehicles, Duhey said in an interview in November.
Newcrest has appointed JPMorgan Chase & Co. and Gresham Advisory Partners Ltd. as its financial advisors and Herbert Smith Freehills as its legal advisor.
The text of this story is published from a wire agency feed without any modification.
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