Gold giant Newmont Mining’s (NYSE:NEM) $10 billion acquisition of Canada’s Goldcorp (TSX:G) is expected to close this week as the deal has received Investment Canada Act approval.
Last week, almost 98%of Newmont’s shareholders approved the deal, which creates the world’s largest gold producer by market value, output and reserves, and robs Barrick of its recently cemented supremacy. Earlier this month, Goldcorp’s investors also gave the transaction their thumbs up.
The combined company, to be called Newmont Goldcorp, will mine in the Americas, Australia and Ghana, producing between 6 and 7 million ounces of gold annually over the next ten years and beyond, the parties said.
It will be initially led by Gary Goldberg, who is retiring by the end of the year. Tom Palmer, the company’s current chief operating officer, will then take over as CEO. Goldcorp’s Vancouver office, in turn, will become the designated base for North American operations for Newmont Goldcorp.
As part of the transaction, Newmont has committed to sell between $1 billion and $1.5 billion worth of assets over the next two years. It has also promised initial cost savings of $100 million a year.
The assets Newmont-Goldcorp is expected to put on the chopping block, combined with mines Barrick plans to sell in the wake of its acquisition of Randgold Resources earlier this year, is expected by analysts to fuel further sector deals.