Newmont acquires Goldcorp for $10bn

The portal is seen at Goldcorp Inc's Borden gold mine near Chapleau

Newmont shares slipped 3%.

Newmont shareholders will retain 65 percent of the company, with Goldcorp shareholders taking the other 35.

U.S. gold giant Newmont Mining (NYSE:NEM) took a page out of Barrick's book by announcing that is buying Canada's Goldcorp (TSX:G) (NYSE:GG) in a $10 billion-deal that would create the world's largest producer by output, challenging Barrick's recently cemented supremacy.

The move comes on the heels of last year's US$18-billion merger between Toronto-based Barrick Gold Corp. and Randgold Resources of New Jersey.

Newmont, meanwhile, has a portfolio of assets in Africa, Australia, South America and the United States.

Canada's Goldcorp, the world's third largest bullion producer by market value, has underperformed its peers in recent years.

Newmont - which has a half share in WA's Super Pit in Kalgoorlie-Boulder with Barrick - will acquire each share of Goldcorp for 0.3280 of its own, plus another 2¢ per share.


"We have a proven strategy and disciplined implementation plan to realize the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of six to seven million ounces over a decades-long time horizon, the sector's largest gold reserve and resource base, and a leading project and exploration pipeline".

"Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance".

The two massive gold transactions have the potential to boost investor interest in an industry that has fallen out of favour after years of weak metal prices, dubious investments and failed deals.

"The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels, and both teams are fully committed to delivering on the transaction's value proposition for all of our stakeholders", Garofalo said.

"Goldberg said he expects the company to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities".

The deal has the unanimous support of the directors of both companies but requires regulatory approvals in several countries.

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