Canada’s Watchdog OKs Newcrest Mining Merger, Creating World’s Largest Gold Miner
Newmont Corporation has been given the green light to go ahead with its ambitious $28.8 billion takeover of Newcrest Mining. This was made possible after the Canadian Competition Bureau (CCB) issued the company with a ‘no action’ letter, allowing the merger to go ahead under Canadian law.
This momentous move will result in Newmont, the world’s largest gold miner, becoming the largest gold miner in the world by production. The merger, which was originally proposed back in February with a $17 billion bid, has been met with approval in several countries, with Newmont now awaiting final regulatory approvals for other vulnerable jurisdictions.
Newmont is excited to create one of the biggest mining companies in history, with mines located around the globe. Andrew Brown, the Chief Operating Officer of Newmont, celebrated the moment with these words: “The combined business is expected to generate pre-tax synergies of $500 million to be achieved within the first 24 months while targeting at least $2 billion in the first two years after closing, thanks to portfolio optimization.”
The merger is a long-standing one, as Newcrest and Newmont were previously a part of the same company back in the 1960s. Newcrest was spun off after the two businesses merged with BHP’s historic gold assets, but now they are finally coming back together after a 25 year separation.
The takeover marks an important step for the mining industry, as it is considered a key metal for the world’s move towards decarbonization. As well as Newmont earlier success in the takeover of Yamana Gold Inc. in March for a total of $5.2 billion.
The final hurdle for this deal is the approval from Australia’s Foreign Investment Review Board, who has expressed serious concerns about the merger that would put four of the country’s five largest gold mines under the control of one company.
Overall, this is a momentous moment in the mining industry, with more to come from this deal as Newmont and Newcrest wait for the final regulatory approvals before the transaction will be able to close in the fourth quarter of the year.
Source: The West