On January 14, Newmont Mining Corp. and Goldcorp Inc. announced they entered into a definitive agreement where Newmont will acquire all of the outstanding common shares of Goldcorp in an all-stock transaction valued at $10 billion. Under the terms of the agreement, Newmont will acquire each Goldcorp share for 0.3280 of a Newmont share, which represents a 17% premium based on the companies’ 20-day volume weighted average share prices.

“This combination will create the world’s leading gold business with the best assets, people, prospects and value-creation opportunities,” said Gary Goldberg, Newmont’s CEO. “We have a proven strategy and disciplined implementation plan to realize the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of 6 million to 7 million ounces (oz) over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline.

“Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance. We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven Full Potential continuous improvement program.”

Newmont Goldcorp’s reserves and resources will represent the largest in the gold sector and will be located in favorable mining jurisdictions in the Americas, Australia and Ghana, representing approximately 75%, 15% and 10%, respectively. Newmont Goldcorp will also prioritize project development by returns and risk, while targeting $1 billion to $1.5 billion in divestitures over the next two years to optimize gold production at a sustainable, steady-state level of 6 million oz to 7 million oz annually.

“This combination creates the world’s premier gold company,” said Goldcorp President and CEO David Garofalo. “The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels, and both teams are fully committed to delivering on the transaction’s value proposition for all of our stakeholders.”

Newmont Goldcorp will be one of Canada’s largest gold producers and will have its North America regional office in Vancouver, he added. Newmont expects to oversee more than 3 million oz of the combined company’s total annual gold production.

In 2017 (latest data available), Newmont produced 5.3 million oz and Goldcorp produced 2.6 million oz.

Newmont Goldcorp’s management team will be appointed on a “best talent” basis, with Goldberg as CEO and Tom Palmer as president and COO. As part of a planned succession process, Goldberg and Newmont’s board have been engaged in discussions anticipating a CEO succession in early 2019. He has agreed to lead Newmont Goldcorp through closure of the transaction and integration of the two companies. The process should be substantially completed in the fourth quarter of 2019, when Goldberg plans to retire and Palmer will become president and CEO. The board of directors will be proportionally comprised of Newmont and Goldcorp directors, with Noreen Doyle as chair and Ian Telfer as deputy chair.

Goldcorp’s Vancouver, Canada, office will become Newmont Goldcorp’s North America regional office. Newmont Goldcorp’s South American regional office will be in Miami, Florida. The Australian regional office will be in Perth. The African regional office will be in Accra, Ghana. Newmont Goldcorp will remain a Delaware corporation with its corporate headquarters based in Colorado, USA. Newmont Goldcorp’s shares will be traded on the New York Stock Exchange using the ticker symbol NEM and expected to be listed for trading on the Toronto Stock Exchange (TSX) following closing of the transaction.

The transaction is expected to close in the second quarter of 2019.