Newmont launches $17bn bid for Australia's Newcrest

Newmont Mining has launched a $17bn all-share bid for Australian rival Newcrest in an attempt to create the world’s biggest gold mining company.

The US-listed firm, which is already the world’s largest gold miner by output, has pitched its offer at a 21% premium to Newcrest’s last closing share price.

Under the proposed deal, shareholders would receive 0.38 Newmont shares for each Newcrest share held, equivalent to AUD $27.16 each.

Newcrest said its board is considering the proposal, which is conditional on Newmont being granted exclusive due diligence.

Newmont boss Tom Palmer said the deal was conditional on approval from Newcrest’s board and regulators.

“We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce and the communities in which we operate,” he said.

The US miner is effectively offering to buy back its old spin-off, with Newcrest originally established as its Australian subsidiary in the 1960s.

Newcrest makes most of its revenue from gold and is increasing its focus on copper as demand for electric car batteries rises. It has mines in Australia, Canada and Papua New Guinea.

Reporting by Frank Prenesti for Sharecast.com