Barrick says its Newmont proposal is 'far superior' to Goldcorp deal

Canadian gold miner Barrick Gold on Monday unveiled a proposed all-share merger with US-based gold major Newmont in transaction, which CEO Mark Bristow said would be “far superior” to Newmont’s proposed $10-billion acquisition of Goldcorp.

Touting the Barrick/Newmont deal as “logical and long overdue”, he said the merger would result in yearly synergies 7.5 times larger than the quoted synergies for the Newmont/Goldcorp transaction.

“The combination of Barrick and Newmont will create what is clearly the world’s best gold company, with the largest portfolio of tier-one gold assets and the highest level of free cash flow to drive future growth and support sustainable shareholder returns, run by a management team with an unparalleled record of delivering value,” Bristow said in a statement announcing the proposed transaction.

In the Barrick proposal, each Newmont shareholder would receive 2.5694 Barrick shares, which Bloomberg News calculates values Newmont at $33.50 a share, or $17.8-billion. On Friday, Newmont closed at $35.41 a share.

Barrick shareholders would own about 55.9% of the merged company and Newmont shareholders would own about 44.1%.

The merger of the two gold majors would combine their complementary assets in US state of Nevada, which Bristow said would result in better mine planning and realising the state's geological potential.

The combination of the two businesses would unlock more than $7-billion pretax net present value of synergies, a major portion of which was generated by combining the assets in Nevada.

Prior to Barrick's announcement on Monday, Newmont CEO Gary Goldberg said to Bloomberg News that a planned bid for the company was a "desperate and bizarre attempt to muddle up" its deal with Goldcorp.

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