Newmont Completes Acquisition of Newcrest

Newmont has acquired Newcrest for US$16.8 billion, creating the world’s largest gold producer, with strong copper production. This recent acquisition sets the stage for decades of responsible and profitable mining operations.

Following the Newcrest acquisition, Newmont has an unparalleled portfolio of long-term operations and several exploration opportunities. "Today marks a historic milestone for our company and for the industry, with the successful completion of this transformational acquisition of Newcrest by Newmont. Our focus is now on safely, efficiently, and responsibly integrating Newcrest's assets and people into our operating model, so that we can accelerate the delivery of our value-focused strategy for all of our stakeholders,” said Tom Palmer, President and CEO, Newmont, through a press release.

The company expects to position itself as a leader in responsible gold mining, supporting decades of safe, profitable and responsible gold and copper production. Newmont also expects to produce US$500 million per year in pre-tax synergies, maintaining industry leadership on environmental, social and governance issues, while having a large pool of mining experts on its team. The company added that it has issued "357,691,627 new Newmont common shares, including 15,720,585 Newmont New Shares, 341,792,611 shares underlying Newmont New CDIs and 178,431 shares underlying Newmont New PDIs."

Newmont first approached its Australian rival in February with a non-binding offer of US$17 billion, which was rejected by the Newcrest board. In April, the US company raised the offer to US$19.5 billion and deemed its best and final one. Newcrest CEO Sherry Duhe stated that the board was willing to recommend the proposal to its shareholders, provided that due diligence was satisfactory.

Gold miners worldwide are facing stagnant production, more challenging deposit conditions and rising input costs. These challenges are seen as a catalyst for further mergers and acquisitions as companies seek to increase their size to boost production and improve efficiency through economies of scale, reported previously MBN.

Newmont faces a decade of gold stagnation and has expressed a desire for more of this transitional energy metal in its portfolio. However, it is not just Newcrest's five gold mines on three continents that attract Newmont, as the Australian company generates about a quarter of its revenue from copper.