Shareholders in US gold giant Newmont Mining (NYSE:NEM) have almost unanimously approved the miner’s proposed $10B takeover of Canada’s Goldcorp (TSX:G) (NYSE:GG), a deal that creates the world’s largest gold producer by market value, output and reserves, robing Barrick of its recently cemented supremacy.
Almost 98 percent of the votes were in favour of the transaction, first announced in January, and which is expected to close in the second quarter of the year.
The resounding approval comes only a week after Goldcorp’s investors also gave the deal their thumbs up.
Almost 98 percent of the votes were in favour of the transaction, expected to close in the second quarter of the year.
“We thank Newmont’s shareholders for their overwhelming support for this compelling value creation opportunity as we build the world’s leading gold company,” Newmont’s chief executive, Gary Goldberg, said in the statement.
The combined company, which will be called Newmont Goldcorp, will mine in the Americas, Australia and Ghana, producing between 6 and 7 million ounces of gold annually over the next ten years and beyond, the parties said.
It will be led by Goldberg, who is retiring by the end of the year. Tom Palmer, the company’s current chief operating officer, will then take over as the CEO. Goldcorp's Vancouver office, in turn, will become the designated base for North American operations of the combined company. Related: Aramco Bond Run Could Delay IPO
As part of the transaction, Newmont has committed to sell between $1 billion to $1.5 billion worth of assets over the next two years. It has also promised initial cost savings of $100 million a year.
The assets Newmont Goldcorp is expected to put on the chopping block, combined with mines Barrick plans to sell in the wake of its acquisition of Randgold Resources earlier this year, is expected by analysts to fuel further sector deals.
Bumpy road
The making of the new gold king was not free of drama. Roughly a month after it was announced, Barrick made a hostile takeover bid for Newmont and urged the Greenwood Village, Colorado-based miner to withdraw its offer for Goldcorp.
Even after Newmont rejected Barrick’s bid and the two miners agreed to create a joint venture in Nevada, uncertainty arose some of the U.S. miner’s major shareholders, including VanEck and Paulson & Co., said they opposed to the deal because it was too much to pay for Goldcorp.
Newmont weathered the storm by promising to sweeten the pot with the largest dividend in 32 years, which will be paid out on May 1 to those who hold shares as of April 17.
By Mining.com
More Top Reads From Safehaven.com
