Newmont Bids $17 Billion for Australian Gold Miner Newcrest

  • In Business
  • 2023-02-06 00:12:29Z
  • By Bloomberg

(Bloomberg) -- Newmont Corp. made a provisional offer to acquire Australia's top gold miner Newcrest Mining Ltd. in what would be the biggest global takeover of the year so far.

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The offer, which values Newcrest at around $17 billion, would also be one of the largest in Australian history, according to data compiled by Bloomberg. Newcrest jumped as much as 14% in early trading, the most since 2008.

Shareholders would receive 0.38 Newmont shares for each Newcrest share held, equivalent to A$27.16 a share or a 21% premium to Friday's close, the Melbourne-based miner said in a regulatory filing Monday. The board is considering the proposal, which is conditional on Newmont being granted exclusive due diligence, Newcrest said.

Denver-based Newmont, one of the world's biggest gold miners with a market value of nearly $40 billion, had made an earlier bid offering an exchange ratio of 0.363, which Newcrest's board rejected.

In September, Newmont delayed a decision on a major investment in Peru until the second half of 2024, citing Russia's war in Ukraine, rising prices for raw materials, prolonged supply-chain disruptions and competitive labor markets. Spot gold has gained about 15% since early November while copper rallied almost 20%.

"The strong Australian dollar, gold prices and declining global reserves suggest more acquisitions are likely, particularly for businesses like Newcrest, which has significant copper exposure," Bloomberg Intelligence industry analyst Mohsen Crofts said in a report Monday.

The approach comes in the middle of Newcrest's search for a new chief executive officer following the resignation of Sandeep Biswas in December. Sherry Duhe, former chief financial officer of oil and gas producer Woodside Energy Group Ltd., is acting CEO until a permanent replacement is found.

Newcrest derives the majority of its revenue from gold, and the rest from silver and copper, with mines in Australia, Canada and Papua New Guinea. The company plans to ramp up the copper component to take advantage of an expected surge in demand for the metal that's a core material in renewable energy infrastructure and electric vehicles, Duhe said in an interview in November.

Newcrest has engaged JP Morgan Chase & Co. and Gresham Advisory Partners Ltd. as its financial advisers and Herbert Smith Freehills as its legal adviser.

--With assistance from Harry Brumpton.

(Updates with details throughout)

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