The Canadian gold-mining company Barrick Gold made a $17.8B hostile takeover bid for its rival, Newmont Mining. If the deal goes through, the resulting giant would be a $42B company — the most gargantuan gold-grabber on the globe.
But given that the title of the world’s largest gold company has changed hands twice in the past 6 months due to a flurry of mergers, the deal is far from certain.
All that glitters is… sold
Consolidation in the gold industry has increased in recent months as extraction costs rise and accessible global gold supplies dwindle.
Last September, Barrick acquired Randgold Resources for $6B, and became at the largest gold mining company in the world. But just 3 months later, Newmont acquired rival Goldcorp for $10B, setting a new gold standard.
Now, Barrick is trying to muscle its way back to the top by acquiring Newmont (which would have to end its acquisition of Goldcorp). But the leadership teams at Barrick and Newmont have a history of bickering.
Who will become the mightiest mineral merchant?
In 2014, Barrick and Newmont discussed a merger, but the deal fell apart due to disagreements between the companies’ leaders.
Today, not much has changed: Barrick accused Newmont of overpaying Goldcorp assets, and Newmont is now writing off Barrick’s offer (an 8% discount on the company’s most recent stock price) as a lowball.
Newmont’s CEO — whose name, cross my heart hope to die, is Gary Goldberg — insisted that Barrick’s acquisition offer “doesn’t make sense.”
