Sept 10 (Reuters) – AngloGold Ashanti will buy Egypt-focused smaller rival Centamin in a $2.5 billion stock and cash deal, the companies said on Tuesday, as the U.S.-listed global miner expands its operations in Africa.
Shares in Centamin jumped about 24% to 148.10 pence in early trade, their highest level since October 2020. Shares in Centamin’s London-listed peer Hochschild rose about 4%.
Under the terms of the deal, Centamin shareholders will receive 0.06983 new AngloGold shares for each Centamin share and $0.125 in cash.
The implied 163 pence ($2.14) per share offer represents a premium of 36.7% to Centamin’s Monday closing price of 120 pence, the companies said in a statement.
The acquisition coincides with a flurry of deal activity in the gold mining sector over the past couple of years, with the world’s top gold producer Newmont buying Australia’s Newcrest Mining for $16.8 billion in late 2023.
In May, miner BHP Group walked away from its $49 billion plan to take over rival Anglo American after its last-ditch request for more time was rejected by the London-listed firm, ending its six-week pursuit for now.
Following the completion of the Centamin deal, it is expected that AngloGold shareholders will own about 83.6% and Centamin shareholders about 16.4% of AngloGold Ashanti’s enlarged issued share capital.
AngloGold Ashanti said it expects the deal to be accretive to free cash flow per share in the first full year post completion of the transaction.
Terming the deal “highly compelling”, AngloGold Ashanti Chair Jochen Tilk said the acquisition offers “enormous geological potential” that the company is well placed to develop.
Centamin’s principal asset is the Sukari gold mine, which is Egypt’s largest gold mine as well as one of the world’s largest producing mines.
Adding Sukari’s annual output of 450,000 ounces would push AngloGold’s yearly production above 3 million ounces, making it the fourth largest gold producer in the world by volume, behind Newmont, Barrick Gold and Agnico Eagle.
The Centamin acquisition also expands AngloGold’s portfolio to yet another key gold producing region. It currently has assets in nine countries – Tanzania, the Democratic Republic of Congo, Ghana, Guinea, Australia, the U.S., Brazil, Argentina and Colombia.
The Centamin board said it intends to unanimously recommend the deal to its shareholders.
($1 = 0.7634 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru, additional reporting by Nelson Banya; Editing by Sonia Cheema, Miral Fahmy, Jan Harvey and David Evans)
