• 6 hours Bankruptcy Is The Only Choice For Many Retailers
  • 9 hours Are Copper Naysayers Missing The Big Picture?
  • 12 hours Jerome Powell's Impossible Challenge
  • 1 day Economists Call For Recession In 2021
  • 1 day Hong Kong Billionaire Loses Big On Canadian Energy Play
  • 2 days Trade Tensions Weigh On South Korea, Japan Relations
  • 2 days Lithium Hype Can't Live Up To Supply Realities
  • 3 days Tesla Scrambles To Salvage Its Stumbling Solar Business
  • 3 days Why Silicon Valley Is Moving To Toronto
  • 3 days Hong Kong Residents Are Fleeing To Taiwan At A Record Pace
  • 4 days Trickle Down Tax Cuts Aren't Helping Bolster GDP Growth
  • 4 days Wealth Gap Widens Between Baby Boomers And Millennials
  • 4 days How Investors Are Playing Uncertain Markets
  • 4 days Demand For Cash Is On The Rise
  • 5 days The Best Way To Ride The Gold Rally
  • 5 days Corn Industry Reeling After Shocking Ethanol Decision
  • 6 days Gold Miners Eye Further Upside
  • 6 days Alibaba Exec Sets Record With $3.5 Billion Brooklyn Nets Purchase
  • 7 days Smart Contracts: The Tech Reshaping Entire Industries
  • 7 days Protests Threaten $5 Billion Peruvian Copper Mine
  1. Home
  2. Investing
  3. Stocks

Newmont Shareholders Approve Goldcorp Takeover

Deal

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

Back to homepage

Leave a comment

Leave a comment