AngloGold Ashanti seeks to expand with $2.5 Billion Centamin takeover: A strategic move in global gold mining.
“We will build on the good work by the Centamin team to realise the significant upside in Centamin. We look forward to welcoming Centamin’s employees and shareholders to our group in the coming months,”
Alberto Calderon,
Chief Eexecutive Officer,
AngloGold.
In a bold move that could reshape the global gold mining industry, AngloGold Ashanti has presented a $2.5 billion takeover offer to acquire Centamin, the owner of Egypt’s largest gold mine, Sukari. This acquisition bid comes at a time when AngloGold is strategically positioning itself to enhance its production capabilities and cement its status as a global leader in gold production.
Centamin, listed on both the London Stock Exchange and the Toronto Stock Exchange, has a long-standing reputation, particularly due to the Sukari mine. Since commencing operations in 2009, Sukari has yielded over 5.9 million ounces of gold, making it one of the most productive gold mines worldwide. The deal, if successful, would add 450,000 ounces to AngloGold’s annual gold output, raising its overall production to 3.1 million ounces and propelling it into the ranks of the world’s top four gold producers.
The proposed deal offers Centamin shareholders an attractive premium. They are being offered 0.06983 new AngloGold shares and $0.125 in cash for each share they hold. This values Centamin shares at 163 pence, representing a 36.7% premium on its closing price as of September 9, 2024, and a 37.6% premium based on its 30-day volume-weighted average price. Upon the acquisition’s completion, AngloGold’s shareholders would hold the lion’s share approximately 83.6% of the combined company, with Centamin shareholders owning the remaining 16.4%.
For AngloGold Ashanti, the Sukari acquisition is not merely about boosting production figures but it is a critical part of the company’s long-term strategy. Alberto Calderon, CEO of AngloGold, expressed his excitement about the prospects of this acquisition, stating, “We will build on the good work by the Centamin team to realise the significant upside in Centamin. We look forward to welcoming Centamin’s employees and shareholders to our group in the coming months.”
Additionally, fhe Sukari mine’s recent performance highlights its ongoing value. In the first two months of the third quarter of 2024 alone, Sukari reported production of 93,278 ounces of gold, with sales of 102,563 ounces at an impressive average realised price of $2,420 per ounce. This acquisition could immediately enhance AngloGold’s financial metrics, with the company expecting an increase in free cash flow and net asset value per share within the first full year post-acquisition.
Centamin’s board, advised by Merrill Lynch International and BMO Capital Markets, has given the green light to the proposal, deeming the offer fair and in the best interests of shareholders. This endorsement paves the way for Centamin shareholders to approve the deal and join forces with one of the mining industry’s heavyweights.
Should the deal be finalized, it will mark yet another departure of a gold mining group from the London Stock Exchange, following in the footsteps of Randgold, which left after being acquired by Barrick Gold. The withdrawal of Russian gold producers due to the ongoing conflict in Ukraine has further depleted the representation of mining companies on the London market.
Conclusively, this acquisition could be the start of a new chapter for AngloGold Ashanti as it strengthens its grip on the global gold market, while Centamin shareholders and employees prepare to embark on a new journey under the AngloGold banner.