BREAKING NEWS

BREAKING NEWS

Newmont to become largest gold producer with $10 billion Goldcorp buy

Newmont to become largest gold producer with $10 billion Goldcorp buy
Text size Aa Aa

By John Benny

(Reuters) - Newmont Mining Corp said on Monday it would buy smaller rival Goldcorp Inc in a deal worth $10 billion (£7.78 billion), creating the world's biggest gold producer in the face of dwindling easy-to-find reserves of the precious metal.

The deal, the second high-profile merger in the mining industry since Barrick Gold Corp agreed to buy Randgold Resources Ltd in September last year, comes as the industry looks for ways to cut costs and increase scale.

The company, which will be called Newmont Goldcorp, is set to overtake current leader Barrick Gold's annual production and will have mines in Americas, Australia and Ghana.

The Denver, Colorado-based company Newmont will also sell $1 billion to $1.5 billion worth of assets over the next two years as part of the deal, mirroring a similar move by Barrick when it announced the Rangold acquisition.

After the deal the new company expects to produce 6-7 million ounces of gold annually over the next ten years and beyond. Barrick has forecast 2018 total gold production in the range of 4.5 million to 5 million ounces.

The new company will be led by Newmont Chief Executive Officer Gary Goldberg. Goldberg will retire at the end of 2019 and Tom Palmer, Newmont's chief operating officer, will then take over as the CEO.

Newmont will offer 0.3280 of its share and $0.02 for each Goldcorp share. Based on Newmont's Friday close, that translates to $11.46 per share, a premium of about 18 percent to Goldcorp's Friday close on the New York Stock Exchange.

The deal is scheduled to close in the second quarter and is expected to generate up to $100 million in savings, the company said.

Vancouver-based Goldcorp's U.S.-listed shares were up about 13 percent before the bell on Monday. Newmont Mining's shares were down 3 percent.

(Reporting by John Benny in Bengaluru; Editing by Shailesh Kuber and Sweta Singh)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.