Gold producers Endeavour and Teranga strike $1.9bn deal

Endeavour said the tie-up would create a top 10 senior gold producer, with combined average annual production of more than 1.5m ounces per year, and could see it enter the FTSE 100 following next year’s planned initial public offering.

Under the deal, Canada’s Endeavour will acquire all of the issued and outstanding securities of Teranga. Endeavour will pay 0.47 of its own shares for each Teranga share, a 5.1% premium to Teranga’s Friday closing price on the Toronto stock exchange.

Existing Endeavour and Teranga shareholders will own approximately 66% and 34% respectively of the combined company.

Endeavour’s biggest investor is Naguib Sawiris, the Egyptian telecoms billionaire. He will own 19% of the combined business, and has committed to invest $200m through his La Mancha vehicle.

Sebastien de Montessus, Endeavour chief executive, said: "By combining our complementary assets, we will enhance our strategic position of West Africa’s highly prospective Birimian Greenstone Belt, and we will have the ability to deliver material synergies.

"The combined entity will become a new senior gold producer and enjoy an improved capital market profile, underpinned by a healthy balance sheet and strong cash flow capabilities."

Richard Young, chief executive of Teranga, said: "This combination, strongly supported by our two largest shareholders, allows Teranga to benefit from an improved valuation as owners of a best in class senior gold producer."