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Newmont Mining to buy Goldcorp in $10 billion deal to create world's largest gold producer

Key Points
  • Newmont Mining said it would buy Goldcorp in a deal valued at $10 billion.
  • The deal will create the world's biggest gold producer by output.
  • It is the second high-profile merger in the mining industry since Barrick Gold agreed to buy Randgold Resources in September last year to cut costs.
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Jim Cramer: Barrick-Randgold deal was better than Newmont acquisition

Newmont Mining said on Monday that it would buy smaller rival Goldcorp in a deal valued at $10 billion, creating the world's biggest gold producer by output.

The deal is the second high-profile merger in the mining industry since Barrick Gold agreed to buy Randgold Resources Ltd in September last year to cut costs.

The gold mining industry has come under fire from investors in recent months for poor management of capital. This combined with falling gold reserves and higher extraction costs have prompted miners to look for cost efficiencies.

"The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels," Goldcorp Chief Executive Officer David Garofalo said in a statement.

The combined company is expected to produce 6 million to 7 million ounces of gold over the next 10 years. In 2017, Newmont produced 5.3 million ounces of gold, while Goldcorp mined 2.6 million ounces.

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 combined company's reserves and resources will represent the largest in the gold sector and will be located in favorable mining jurisdictions in the Americas, Australia, and Ghana, the companies said.

Goldcorp's U.S.-listed shares were up 13 percent before the bell on Monday. Newmont Mining's shares were down 2.6 percent.

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Key Points
  • Major Asian real estate developer CapitaLand said on Monday it has entered into an agreement to buy two wholly owned units from Ascendas-Singbridge, a subsidiary of Singapore investor Temasek, in a cash and stock deal.
  • If the deal is approved, the new entity would become Asia's largest diversified real estate group, according to CapitaLand.
  • Its combined assets under management would exceed 116 billion Singapore dollars ($85.79 billion), which would put it among the top 10 real estate investment managers globally, CapitaLand said.