Newmont Acquires Newcrest, Creating World’s Biggest Gold Mining Company

Newmont (NEM), the world’s biggest gold mining company, acquired Australia-based rival Newcrest Mining Ltd. for $19.2 billion in the industry’s biggest deal to date.

Newcrest shareholders will receive 0.4 Newmont shares in exchange for each share of Newcrest and a special dividend of $1.10 per share paid for by Newcrest in the deal, via an Australian Scheme of Arrangement announced Monday.

The purchase will allow the Colorado-based company, already the world’s biggest gold miner, to expand its global scope with mining operations across the Americas, Africa, Australia, and Papua New Guinea. If approved by regulators, it would be the largest deal in the gold mining sector to date, surpassing the company’s purchase of rival Goldcorp in 2019.

Gold miners worldwide are facing stagnating production amid rising input costs and harder-to-mine deposits. That’s raising the attractiveness of mergers and acquisitions in the industry, as companies seek to boost volumes and improve efficiency.

The lucrative deal comes as gold prices are surging due to the metal’s appeal as a safe-haven asset in times of economic uncertainty. In recent weeks, the price of gold has traded just short of an all-time high of about $2,070 per ounce set in August 2020.

Newmont originally offered $17 billion for the acquisition earlier this year, before sweetening the terms to close the deal.

Newmont shares were roughly flat in early trading Monday. They’re down almost 3% year-to-date, compared with a 35% return for Newcrest shares over the same period.