Newmont Offers $17 Billion for Australian Gold Miner Newcrest

(Bloomberg) — Newmont Corp. has made a tentative offer to acquire leading Australian gold miner Newcrest Mining Ltd. in what will be the largest global acquisition of the year so far.

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

Shareholders will receive 0.38 Newmont shares for each Newcrest share they hold, equivalent to A$27.16 per share or a 21% premium by Friday’s close, the Melbourne-based mining company said in a regulatory filing on Monday. The board of directors is considering the proposal on the condition that Newmont be granted exceptional due diligence, Newcrest said.

Denver-based Newmont, one of the world’s largest gold miners with a market value of nearly $40 billion, had previously made a bid at a 0.363 swap that Newcrest’s board of directors 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 commodity prices, prolonged supply chain disruptions and competitive job markets. Spot gold is up about 15% since the beginning of November, while copper is up almost 20%.

“A strong Aussie, gold prices and shrinking global reserves suggest new acquisitions are likely, especially for companies like Newcrest, which have significant exposure to copper,” Bloomberg Intelligence industry analyst Mohsen Crofts said in a report Monday.

The approach came at the height of Newcrest’s search for a new chief executive officer following the resignation of Sandeep Biswas in December. Sherry Duet, former CFO of oil and gas company Woodside Energy Group Ltd., is acting as CEO until a permanent replacement is found.

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Newcrest derives most of its income from gold and the rest from silver and copper, with mines in Australia, Canada and Papua New Guinea. The company plans to ramp up production of copper to take advantage of expected growth in demand for the metal, a key material in renewable energy infrastructure and electric vehicles, Duet said in an interview in November.

Newcrest hires JP Morgan Chase & Co. and Gresham Advisory Partners Ltd. as financial advisors and Herbert Smith Freehills as legal advisor.

–With the assistance of Harry Brumpton.

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