Barrick Gold proposes merger with Newmont Mining to create the 'world's best gold company'

  • Barrick Gold has proposed a merger with Newmont Mining.
  • The proposal values Newmont Mining at $US17.8 billion, according to Bloomberg.
  • Barrick says its proposal is “far superior” to Newmont’s deal to buy Goldcorp for $US10 billion.
  • Watch Barrick Gold and Newmont Mining trade live.

Barrick Gold is making a play for Newmont Mining in a deal that it said would create the “world’s best gold company” and unlock more than $US7 billion net present value (pretax) of real synergies.

Barrick proposed an all-share transaction that would pay Newmont shareholders 2.5694 Barrick shares per Newmont share, valuing the company at $US17.8 billion, or $US33.50 a share, according to Bloomberg. The deal would give Barrick shareholders 55.9% of the merged company, with the rest going to Newmont shareholders.

“The combination of Barrick and Newmont will create what is clearly the world’s best gold company, with the largest portfolio of Tier One gold assets and the highest level of free cash flow to drive future growth and support sustainable shareholder returns, run by a management team with an unparalleled record of delivering value,” Barrick’s president and CEO, Mark Bristow, said in a press release.

Barrick says the proposal is “far superior” to the deal that Newmont made in January to buy Goldcorp for $US10 billion, creating the world’s largest gold miner. That deal is expected to close in the second quarter of 2019.

It has been a busy time for mergers and acquisitions in the gold-producer space. Last September, Barrick agreed to a deal with Randgold Resources that closed earlier this year.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.