Herbert Smith Freehills (HSF) has advised Newcrest Mining Ltd (Newcrest) on its proposed acquisition by Newmont Corporation (Newmont) with an implied value of A$26.2 billion, including a special dividend of up to US$1.10 per Newcrest share.
The transaction is the third-largest public M&A deal in Australian corporate history and is the largest agreed deal globally so far this year.
The transaction brings together two of the world's leading gold producers to establish the world’s largest gold producer. It is the latest in sector consolidation that has been underway in the gold industry in recent years.
Under the terms of the transaction, Newcrest shareholders will receive 0.400 Newmont shares for each Newcrest share held. In addition, Newcrest is permitted to pay a special dividend of up to US$1.10 on or around implementation, which is expected in October/November, subject to regulatory approvals. The transaction represents an implied Newcrest share price of A$29.29, which is a 39% premium to the 30-day VWAP prior to the market being informed of discussions between the parties.
The HSF team was led by partners Rodd Levy and Kam Jamshidi, with senior associate Simon Walker, and solicitors Kurt Fisher and Nancy Darmanin. They were supported by HSF partner Neena Aynsley, executive counsel Zoe Leyland, and senior associate Emily Reyher on due diligence aspects, and partner Sarah Benbow and senior associate Jared Peut on competition law aspects.
HSF partner Rodd Levy said, “This is a globally significant transaction that combines the complementary strengths of Newcrest and Newmont. The combined entity will be the largest gold producer in the world by some measure.”
HSF partner Kam Jamshidi said, “This transaction exemplifies some of the current key themes in M&A, in particular that resources M&A is firing, highlighting both the drive for scale and positioning for commodity market strength. In addition, while they always feature heavily in our local market, US-based bidders continue to be particularly active at the moment.”
This is an example of HSF’s market-leading work in M&A. Other examples include advising Origin Energy on its proposed A$15.5 billion acquisition by a Brookfield-led consortium, Crown Resorts on its acquisition by Blackstone for A$9.3 billion, BHP on the US$21 billion sale of BHP Petroleum to Woodside for scrip consideration, and Sydney Aviation Alliance on its A$32 billion acquisition of Sydney Airport.
Newmont was advised by King & Wood Mallesons.