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Australian Gold Mining Firm Newcrest Supports Newmont's $17.8 Billion Bid

Australian Gold Mining Firm Newcrest Supports Newmont's $17.8 Billion Bid
Newcrest Mining Ltd, an Australian gold miner, announced on Monday that it will support Newmont Corp's A$26.2 billion ($17.8 billion) takeover bid, one of the world's largest buyouts this year.
The transaction, which is subject to approval by both companies' shareholders and other regulatory hurdles, would nearly double Newmont's gold output and vault the miner past Freeport McMoRan to become the largest U.S. gold and copper producer by market capitalisation.
Newcrest shareholders would receive 0.400 Newmont share for each share held, with an implied value of A$29.27 per share, a greater exchange ratio than the 0.380 rejected by Newcrest's board in February.
Newcrest shares started 1.5% higher on Monday at A$28.68, with the offer representing a 30.4% premium to the stock's price in February before the Newmont deal became known.
On the implementation of the arrangement that distributes tax credits to Australian shareholders, Newmont will also allow Newcrest to pay a franked special dividend of up to $1.10 per share.
According to Refinitiv and Reuters calculations, the merger will be the third-largest deal ever involving an Australian company and the third-largest globally in 2023.
"This transaction will combine two of the world's leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline," said Newcrest Chairman Peter Tomsett.
Newmont stated that once the purchase was completed, it would have around 8 million ounces of total combined annual gold production, with more than 5 million gold ounces coming from 10 long-life and low-cost mines.
The Denver-based miner noted that the aggregate annual copper production from Australia and Canada would be around 350 million pounds.
Newcrest stockholders will have the option of receiving either Newmont shares listed on the New York Stock Exchange or CHESS Depository Instruments (CDIs) listed on the Australian Securities Exchange as payment.
Newcrest advised its shareholders to vote in favour of the merger at a meeting scheduled for September or October.
The transaction must be approved by Australia's Foreign Investment Review Board (FIRB), as well as Newcrest and Newmont shareholders voting in favour of the transaction, among other regulatory conditions.
The firms stated that the transaction would be completed in the fourth quarter of 2023.

Christopher J. Mitchell

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