Barrick Gold is attempting to become the world’s largest gold producer by launching a hostile $17.8 billion all-share takeover offer for Newmont Mining. The bid comes in the wake of a number of on-and-off talks between the two mining companies about a merger. The last such talks took place in 2014.
The bid, if successful, would also leave uncertain, the fate of Newmont’s own $10 billion takeover of Goldcorp that was announced last month. Newmont CEO Gary Goldberg commented, “It’s a desperate and bizarre attempt to muddle up our deal,” adding, “It is certainly not the sort of behaviour that will appeal to investors who want to invest in serious, well-run companies.”
Barrick Executive Chairman John Thornton wrote to the Newmont board, stating, “There is no other transaction in our industry that can create better value for shareholders and other stakeholders than a business combination between Newmont and Barrick. The market reaction to date to your Goldcorp transaction, suggests that investors do not endorse your rationale.”
Barrick and Newmont have adjoining gold mining assets in Nevada and these are considered to be among the key considerations in impelling the prospective deal. The two companies have talked in the past about how some sort of unification of the operations might benefit them both.