Australian gold miner Newcrest Mining (NCM.AX) has disclosed that Newmont Corporation (NEM.N), its suitor for a proposed A$26.2 billion ($16.68 billion) buyout, has received all government regulatory approvals required for the deal to go through.
Meanwhile, the deal still awaits the crucial Newcrest shareholder vote, scheduled for Oct. 13. “The approvals include ones from the Australian Foreign Investment Review Board and competition authorities in Australia, Canada and Papua New Guinea,” Newcrest said in a statement.
Australia’s largest gold miner, Newcrest, had in May backed the takeover offer from Newmont, in what would be the third-largest deal ever involving an Australian company.
Newmont disclosed that it has received nods from the Securities Commission of Papua New Guinea and also the Philippine Competition Commission.
Newmont, the world’s largest gold producer, and Newcrest anticipate the transaction closing in the fourth quarter of this year, subject to the satisfaction of customary closing conditions.
Newmont indicated that it expected the merged gold giant to generate annual pre-tax synergies of $500 million, likely to be achieved within the first two years post closing.
“The combined business is also targeting at least $2 billion in cash improvements through portfolio optimization in the first two years after closing,” the world’s largest gold miner added.
Exceptional Value Proposition
Meanwhile, Tom Palmer, President and CEO of Newmont noted that the combination of Newmont and Newcrest represents an exceptional value proposition for shareholders and other stakeholders. It creates an industry-leading portfolio with a multi-decade gold and copper production profile in the world’s most favorable 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.
“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 maximize value for shareholders and other stakeholders.”Tom Palmer
Mr. Palmer continued stating that 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 portfolio7. “We intend to quickly realize these opportunities to create superior value for our shareholders, workforce, host communities and governments,” he said.
Newcrest’s Chairman, Peter Tomsett, added saying “This transaction combines two of the world’s leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline,” he added.
“In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefitting from a material and growing exposure to copper and a market leading position in safety and sustainability.
“The Newcrest Board Is unanimously recommending the proposal. 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.”Peter Tomsett
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