Barrick-Newmont Merger Talks Said to Hit Snag on Spinoff
By David Welch, Matthew Campbell and Liezel Hill bloomberg.com
Talks to merge the world’s biggest gold-mining companies, Barrick Gold Corp. (ABX) and Newmont Mining Corp. (NEM), broke down three days ago amid minor disagreements that leave open the possibility that a deal could be revived, two people with knowledge of the matter said.
The companies had agreed to an all-stock merger and planned to announce the deal this week, the people said, asking not to be identified discussing private information. Barrick was to offer Newmont shareholders a premium of 13 percent more than Newmont’s average share price over the latest 20 trading days, one of the people said.
The companies had agreed to all terms not related to a spinoff of Australian and New Zealand assets, the person said. They’ve identified $1 billion a year in cost savings, mostly from their mines in Nevada, the people said. Toronto-based Barrick and Newmont of the U.S. have a combined market value of about $33 billion and operate on five continents. The merger talks follow gold’s 28 percent plunge in 2013, the most in three decades, which squeezed profits and spurred at least $30 billion of writedowns by producers.
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