Newcrest Mining will enter into a binding scheme implementation deed (SID) with Newmont, after agreeing to Newmont’s $26.2 billion takeover offer and proposal to acquire 100 per cent of the issued shares in Newcrest through an Australian court-approved Scheme of Arrangement.
This marks one of the world’s largest buyouts so far for 2023, and the third-largest deal involving an Australian company to date, according to data from Refinitiv and Reuters calculations.
Under the terms of the Newmont Transaction, Newcrest shareholders will receive 0.400 Newmont shares for each Newcrest share and a special dividend of up to USD$1.10 per share paid by Newcrest, representing a 30.4 per cent premium. Newcrest shareholders will be able to choose to receive New York Stock Exchange-listed Newmont shares or Australian listed CHESS Depository Instruments (CDIs) as payment.
The Newcrest Board unanimously recommends that shareholders vote in favour of the Newmont Transaction – subject to no superior proposal emerging for Newcrest – concluding that the transaction is in the best interests of Newcrest shareholders.
Additionally, the Board of Newmont unanimously recommends that Newmont stockholders vote in favour of the required Newmont stockholder resolution.
The scheme of arrangement is subject to a number of conditions, including approval of Newcrest shareholders at a Scheme Meeting which is expected to be held in September or October 2023. The deal also requires Australia’s Foreign Investment Review Board (FIRB) sign-off, among other regulatory approvals.
The transaction is expected to establish a clear global leader in gold production by combining two of the world’s largest producers, with a significant and growing exposure to copper. If the Scheme receives all relevant approval, it would boost Newmont’s gold output to nearly double its nearest rival, Barrick Gold Corp.
Newmont said it would have about eight million ounces of total combined annual gold production once the deal closes, with more than five million gold ounces from ten long-life and low-cost mines.
President and CEO of Newmont, Tom Palmer, said the combination of Newmont and Newcrest creates an industry-leading portfolio with a multi-decade gold and copper production profile in the world’s most favourable mining jurisdictions.
“Following a robust due diligence process, we have identified a number of opportunities to unlock substantial value and will apply our experience and expertise to Newcrest’s complementary and exceptional portfolio of long-life, low-cost gold and copper assets,” Mr Palmer said.
“Leveraging our experience from the acquisition of Goldcorp four years ago, we are positioned to deliver an estimated $500 million in annual synergies and an estimated $2 billion in incremental cash flow from portfolio optimization opportunities, both part of our strategy to maximise value for shareholders and other stakeholders.”
Mr. Palmer said this transaction also increases Newmont’s annual copper production – a metal vital for the new energy economy – and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to its robust and balanced portfolio.
“We intend to quickly realise these opportunities to create superior value for our shareholders, workforce, host communities and governments,” Mr Palmer said.
Newcrest Chairman, Peter Tomsett, said the transaction combines two of the world’s leading gold producers, bringing significant value to Newcrest shareholders through the recognition of the company’s growth pipeline.
“In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefiting from a material and growing exposure to copper and a market leading position in safety and sustainability,” Mr Tomsett said.
“We are very proud of the entire Newcrest team for building a world class metals business, which will form a key part of the combined group.
“We believe our shareholders and other stakeholders can look forward to an exciting and prosperous future.”
