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World’s largest gold miner Newmont offers $17bn to buy its rival Newcrest


Newmont, the world’s largest gold producer, has offered to acquire Newcrest Mining, Australia’s largest gold miner. This $17bn takeover bid is the biggest takeover offer announced this year, highlighting the industry’s aim to consolidate in the face of growing costs and a decreasing number of high-performing gold mines.


The newly combined company will produce nearly twice as much gold as their closest competitor, Barrick Gold, the world’s second-largest producer. The combination would also reunite the companies. In the 1960s, Newcrest was established as Newmont’s Australian division. After merging with BHP’s gold assets in 1990, it was spun off.

More firms are considering mergers and acquisitions to increase their scale as a result of growing expenses in Australia’s mining industry, production issues for gold, and price volatility caused by significantly higher interest rates.


The bid implies a 21% premium to Newcrest’s last closing share price. After the announcement, Newmont shares fall by nearly 5% while Newcrest gains over 9%. Newcrest shareholders would receive 0.38 Newmont shares for every Newcrest share, giving Newcrest a 30% stake and Newmont a 70% stake in the combined company. BofA Securities, Centerview Partners LLC and Lazard are acting as Newmont’s financial advisers. JPMorgan and Gresham Advisory Partners are acting as Newcrest’s financial advisers.


Written by: Quynh Chi Le


Sources: Financial Times, Newmont



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