Barrick Gives up on $18 Billion Newmont Takeover for Joint Venture Instead


The mining industry has had a new dose of excitement over the past few months as a series of major multi-billion-dollar acquisitions were announced. The most closely followed of which was the recently Barrick-Newmont takeover bid.

Estimated at an $18 billion, the hostile takeover offer would see Barrick Gold (TSE: GOLD) become the world’s largest gold miner. Prior to this, Newmont Mining (NYSE: NEM) had announced they were going to takeover Canadian-gold giant Goldcorp (TSE: G) in a $10 billion deal, in which the combined entity would dethrone Barrick as the world’s largest gold producer. However, after Newmont rejected the Barrick offer, it turns out that the company has given up on the takeover and official retracted it’s bid.

While this has put an end to the much-watched development, the two mining giants did agree to operate a new joint venture in Nevada, with Barrick holding 61.5 percent and Newmont retaining the rest. This new joint venture company, underneath the two giants, is expected to produce 4.1 ounces of production a year and be one of the world’s largest gold producers on its own.

Both Barrick and Newmont have a 20-year history of trying to come to an agreement to work together in Nevada. Both companies ended up claiming the agreement as a victory for their shareholders, although it was Newmont that first made the proposal.

I think it was the combination of us putting out a constructive proposal to realize the synergies that everyone knew were there in Nevada, and listening to shareholders,” added Tom Palmer, Newmont’s incoming CEO who is replacing his predecessor in 2019. Overall, the joint venture marks an end to the much-anticipated merger excitement between these mining giants. While Barrick executives at first turned down the joint venture proposal, shareholders were more sympathetic to the offer then first expected, which prompted the company to change their mind.

Newmont’s stock was up two percent in response to today’s news. Newmont Mining instead dropped around 0.7 percent in contrast.

Barrick Gold Company Profile

Barrick Gold Corp is a gold mining company. The Company is principally engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company’s segments, include Barrick Nevada, Golden Sunlight, Hemlo, Jabal Sayid, Kalgoorlie, Lagunas Norte, Lumwana, Porgera, Pueblo Viejo, Turquoise Ridge, Veladero and Zaldvar. Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge are its individual gold mines.

The Company, through its subsidiary Acacia, owns gold mines and exploration properties in Africa. Its Porgera and Kalgoorlie are gold mines. Zaldivar and Lumwana are copper mines. The Pascua-Lama project is located on the border between Chile and Argentina. The Company owns a number of producing gold mines, which are located in Canada, the United States, Peru, Argentina, Australia and the Dominican Republic. – Reuters

Newmont Mining Company Profile

Newmont is a leading gold and copper producer. The Company’s operations are primarily in the United States, Australia, Ghana, Peru and Suriname. Newmont is the only gold producer listed in the S&P 500 Index and was named the mining industry leader by the Dow Jones Sustainability World Index in 2015, 2016, 2017 and 2018.

The Company is an industry leader in value creation, supported by its leading technical, environmental, social and safety performance. Newmont was founded in 1921 and has been publicly traded since 1925. – Newmont