AngloGold Ashanti Launches $2.5 Billion Takeover of Centamin
AngloGold Ashanti has initiated a $2.5 billion share and cash takeover of Centamin, the African gold miner producing 470,000 ounces annually.
Centamin’s board has irrevocably supported the offer, which values Centamin shares at 163 pence, reflecting a 36.7% premium to its previous closing price and a 37.6% premium to its 30-day volume-weighted average price.
Centamin operates the Sukari gold mine in Egypt, which produced 224,738 ounces in the first half of this year. The company recently completed a definitive feasibility study on its Doropo project in Ivory Coast, estimated to cost $373 million.
If successful, the acquisition will increase AngloGold’s annual gold production to 3.1 million ounces, making it the world’s fourth-largest gold producer.
Sukari is also expected to reduce AngloGold’s all-in sustaining costs (AISC), which averaged $1,196/oz over the past year, compared to AngloGold’s current guidance of $1,500 to $1,600/oz.
Initial market reactions were mixed: AngloGold’s shares dropped over 7% on the Johannesburg Stock Exchange, while Centamin’s stock surged 24% to 148.3 pence in early trading on the London Stock Exchange.
AngloGold CEO Alberto Calderon stated that the deal would be cash-flow positive in the first year of full production and accretive to net asset value from the outset.
He added that AngloGold would leverage its corporate infrastructure and expertise in exploration, operations, and asset optimization to unlock further value.
This acquisition is part of a recent wave of mergers and acquisitions in the mining sector, following Newmont’s $14.5 billion takeover of Newcrest and Gold Fields’ C$2.16 billion bid for Osisko Mining. Mining sector deals across all metals grew 3% year-on-year to $64 billion in 2023, according to PwC.
Under AngloGold’s offer, Centamin shareholders will receive 0.06983 new AngloGold shares and $0.125 in cash per share, valuing Centamin at £1.9 billion ($2.5 billion). AngloGold shareholders will own approximately 83.6% of the combined company, while Centamin shareholders will hold about 16.4%.
Centamin shareholders are also entitled to their recently declared interim dividend of $0.0225 per share, payable in September.
Centamin CEO Martin Horgan expressed confidence that the transaction would support the continued growth of Centamin’s assets. He highlighted Sukari’s importance within the Nubian Shield, a promising gold district benefiting from Egypt’s recent liberalization of mining regulations.
The transaction is expected to close in the fourth quarter, with Centamin shareholders set to vote on the scheme around October 28. No prior approval from the Egyptian government is required, apart from competition approval.
