A new giant in the gold industry is about to emerge.
　　On May 14, according to Bloomberg, Australia's largest gold mining company, Newcrest Mining Ltd., has agreed to a takeover deal with Newmont Corp., the world's largest gold mining company. The deal is valued at approximately A$28.8 billion (equivalent to US$19.2 billion, or roughly RMB 133.8 billion). Reports indicate that the two companies are now in the final stages of negotiations.
　　After the deal is completed, Newmont, already the world’s largest gold mining company, will further expand its scale and join forces with Newcrest to form the world’s new largest gold miner.
　　A double price hike is inevitable.
　　Ranked by gold production, Newmont is undoubtedly the “No. 1” player in the global gold industry. According to data from Refinitiv, a consulting firm, Newmont’s mine gold production reached 185.3 tons in 2022, far surpassing the output of second-place Barrick Gold, which came in at 128.8 tons. Yet, this industry giant is far from satisfied with its current position.
　　In February of this year, Newmont made a takeover offer to Newcrest, seeking to acquire 100% of its equity for US$16.9 billion (approximately RMB 115 billion). (For more details, see the previous report by the mining industry: “RMB 115 billion! The largest deal so far this year! Has the era of mega-mergers among global mining companies arrived?”)
　　The transaction is proposed to be completed entirely in the form of stock, with each share of Newcrest stock being exchanged for 0.38 shares of Newmont stock. This marks Newmont’s second bid; compared to its previous offer, the exchange ratio has increased by approximately 4.7%. Upon completion of the transaction, the existing shareholders of Newmont and Newcrest will hold 70% and 30% equity stakes, respectively, in the new company. However, amid the current “bull market” in the gold industry, Newcrest has rejected this offer, stating that “Newcrest Mining’s long-term gold reserves should be worth even more.”
　　To achieve its acquisition goal, the gold giant has raised its offer. According to the latest proposal, each share of Newcrest stock can be exchanged for 0.4 shares of Newmont stock. Following the merger of the two companies, Newcrest will hold a 31% equity stake in the combined group. This transaction values Newcrest at an implied enterprise value of A$28.8 billion, including net debt. In addition, Newcrest will also pay a special pre-closing dividend of US$1.10 per share. The company stated that it has agreed to extend Newmont’s due-diligence period until May 18.
　　According to Refinitiv data, in 2022, Newcrest Mining produced 67.3 tons of gold, ranking it eighth globally. The combination of the world’s number one and number eight producers will inevitably create a “giant” of enormous scale.
　　The golden age of industry consolidation is upon us.
　　According to Bloomberg, Peter Tomsett, Chairman of Newcrest Mining, stated: “This transaction will bring together two globally leading gold producers and, by recognizing our outstanding growth prospects, deliver significant value to Newcrest’s shareholders.”
　　It is understood that Newcrest’s key assets include large gold-copper mines in the Pilbara region of Western Australia, the Brucejack gold mine in Canada, and the Lihir and Hidden Valley gold mines located in Papua New Guinea. Following this merger and expansion, Newmont will have gold assets in North America, South America, Africa, Australia, and Papua New Guinea.
　　It is worth noting that the transaction will also expand Newmont’s copper assets. As an important metal for new energy applications, copper mines are currently in high demand in global markets, and several consulting firms believe that copper holds considerable long-term investment value. Approximately one-quarter of Newcrest’s revenue comes from copper mines, which could be a significant benefit for Newmont.
　　Bloomberg reported that this deal could mark the culmination of nearly five years of intense consolidation among major global gold miners.
　　Just this year alone, the gold industry has already witnessed two major mergers and acquisitions—the latest being Newmont’s acquisition—and earlier in March, Pan American Silver and Agnico Eagle Mines’ takeover of Yamana Gold. According to Refinitiv data, this deal will become the largest acquisition so far this year and one of the biggest-ever acquisitions in Australian history.
　　Industry insiders believe that the gold sector is currently facing challenges such as stalled production growth and rising input costs. As a result, companies are compelled to strive for greater market influence by expanding their scale, increasing their market share, and enhancing resource concentration, thereby improving efficiency and profitability.