An Australian gold producer has declared its support for the $28.8 billion acquisition of the largest gold miner in the world.
On Monday, the board of Newcrest Mining Ltd. announced its support for the agreement with its rival, which, if successful, would represent one of the largest buyouts in history so far this year.
If the deal goes through, the prospective buyer, Newmont Corp., would overtake other US producers of copper and gold in terms of market capitalization.
With the acquisition, Newmont would benefit from an annual increase in copper production of about 350 million pounds from both Australia and Canada.
The Denver-based miner would also produce more than 5 million gold ounces annually across ten low-cost, long-life mines for a combined total of about 8 million ounces.
Peter Tomsett, the company’s chairman, stated that the board had unanimously recommended the takeover and that it would provide “significant value” to Newcrest investors.
The combined group, he said, “will set a new benchmark in gold production while benefiting from a material and rising exposure to copper, and a market-leading position in safety and sustainability, in addition to the ongoing aids of merging these premier portfolios.”
“We believe that our shareholders and other stakeholders can look forward to an exciting and prosperous future.”
The acquisition is subject to shareholder approval, which is anticipated in September or October, as well as regulatory approval from authorities in Canada and PNG.
If the two mining companies merge, Newcrest shareholders would own more than 31% of the new company after receiving 0.4 shares for every Newmont share.