AngloGold Ashanti is to acquire Centamin in a $2.5 billion transaction

The U.S.-listed global miner, AngloGold Ashanti (AU.N), will acquire Centamin (CEY.L), a smaller rival focused on Egypt, in a $2.5 billion stock and cash transaction, the companies announced on Tuesday. The acquisition is part of the global miner’s expansion in Africa.

In early trade, Centamin’s shares surged by approximately 24% to 148.10 pence, their highest level since October 2020. Stocks of Hochschild, Centamin’s London-listed competitor (HOCM.L), increased by approximately 4%.
The shares of AngloGold, which are listed in New York, were down 6% in premarket trading.

Centamin shareholders will receive $0.125 in cash and 0.06983 new AngloGold shares for each Centamin share, as stipulated in the agreement.

The companies stated in a statement that the implied 163 pence ($2.14) per share offer represents a 36.7% premium to Centamin’s Monday closing price of 120 pence.

Newmont (NEM.N), the world’s largest gold producer, acquired Australia’s Newcrest Mining for $16.8 billion in late 2023. This acquisition aligns with a surge in deal activity in the gold mining sector over the past few years.

Gold Fields (GFIJ.J), a peer of AngloGold, announced on August 12 that it would acquire Osisko Mining (OSK.TO) for C$2.16 billion ($1.59 billion). This announcement comes two years after Gold Fields failed to acquire Yamana Gold, another Canadian miner, due to a competing offer from Agnico Eagle (AEM.TO) and Pan American Silver Corp (PAAS.TO).

AngloGold Ashanti’s enlarged issued share capital is anticipated to be owned by AngloGold shareholders at approximately 83.6% and Centamin shareholders at approximately 16.4% following the conclusion of the Centamin deal.

AngloGold Ashanti anticipates that the transaction will be beneficial to its free cash flow per share in the first complete year following its completion.

Jochen Tilk, the Chair of AngloGold Ashanti, described the agreement as “highly compelling” and stated that it presented “enormous geological potential” that the company was well-positioned to exploit.

The Sukari gold mine, which is one of the world’s greatest producing mines and the largest gold mine in Egypt, is Centamin’s primary asset.

AngloGold would become the fourth largest gold producer in the world by volume, following Newmont, Barrick Gold (ABX.TO), and Agnico Eagle (AEM.TO), as its annual production would surpass 3 million ounces with the inclusion of Sukari’s 450,000 ounces annual output.

AngloGold’s portfolio is also expanded by the Centamin acquisition to include yet another significant gold-producing region. Tanzania, the Democratic Republic of Congo, Ghana, Guinea, Australia, the United States, Brazil, Argentina, and Colombia comprise its current asset portfolio.

The Centamin board has stated that it intends to unanimously endorse the transaction to its shareholders.

($1 is equivalent to 0.7634 pounds)

($1 is equivalent to 1.3567 Canadian dollars)