Newmont Corp. (NYSE: NEM) sealed the deal to become the world’s largest producer of gold as it announced the acquisition of Newmont through an Australian court-approved Scheme of Arrangement. As a part of this deal, Newcrest shareholders will receive 0.400 Newmont shares for each Newcrest share and a special dividend of up to $1.10 per share paid by Newcrest, representing a 30.4% premium.
This deal values Newcrest at A$26.2 billion, including the dividend, with an enterprise value of A$28.8 billion. After the close of the acquisition, Newmont shareholders will own around 69% of the combined entity while Newcrest shareholders will own the remaining 31%.
Tom Palmer, President and CEO of Newmont commented, ” Leveraging our experience from the acquisition of Goldcorp four years ago, we are positioned to deliver an estimated $500 million in annual synergies and an estimated $2 billion in incremental cash flow from portfolio optimization opportunities, both part of our strategy to maximize value for shareholders and other stakeholders.”
Palmer added that this acquisition will also result in adding “nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio.”
Analysts remain bullish about NEM stock with a Strong Buy consensus rating based on eight Buys and two Holds.
