Canada’s regulator clears Newmont’s acquisition of Newcrest

Mining giant Newmont (NYSE: NEM) said on Tuesday the Canadian Competition Bureau had cleared the company to proceed with its intended acquisition of Australia’s Newcrest Mining (ASX, TSX: NCM).

Newmont, the world’s largest gold miner, said it is also progressing towards receiving regulatory approvals in other jurisdictions, with a transaction close expected in the fourth quarter of the year.

The US-based gold producer first approached Newcrest in February with a $17 billion takeover bid, which was later improved to $19.2 billion. 

The merger, agreed on in May, would create by far the world's biggest gold miner by production, with mines in North and South America, Africa, Australia and Papua New Guinea.

Newmont said the combined business is expected to generate pre-tax synergies of $500 million to be achieved within the first 24 months while targeting at least $2 billion in the first two years after closing, thanks to portfolio optimization.

The deal, one of the biggest in Australian history, grows Newmont’s footprint in copper, one of the metals considered key for the world’s move towards decarbonization.

It also marks the apogee of a furious five-year consolidation among the world’s largest gold miners that began with Barrick Gold’s (NYSE: GOLD) (TSX: ABX) $18 billion pursuit of Randgold Resources and includes a $5.2 billion takeover of Yamana Gold Inc. that was completed in March.

The combination of the two gold miners would bring them back together after almost 25 years. Melbourne-based Newcrest was established in the 1960s as Newmont’s Australia arm and it spun out in 1990, after it merged with BHP’s historic gold assets.

The takeover still requires favourable votes from shareholders of the two companies and the approval from Australia's Foreign Investment Review Board, as the deal would put four of the country’s five largest gold mines under the control of one company.