Anglogold Ashanti is to buy FTSE 250-listed Centamin in a deal worth $2.5bn (£1.9bn), it has been announced.
The deal represents a premium of 36.7 per cent to Centamin’s closing share price yesterday. Centamin shareholders will own around 16 per cent of Anglogold Ashanti’s enlarged share capital.
The South African gold mining giant said Centamin was a “compelling strategic fit”, highlighting the firm’s Sukari mine in Egypt.
The mine is Egypt’s largest gold mine and is also one of the world’s largest, having produced 5.9m ounces of gold since entering production in 2009.
Anglogold Ashanti said it was “well-suited” to be the operator of the Sukari mine given its “long track record in Africa operating similar large-scale open pit and underground mines.”
Jochen Tilk, chair of the firm, said the transaction was “highly compelling” and “offers enormous geological potential that we are very well placed to develop”.
Anglogold Ashanti said it expects the deal to be accretive to free cash flow per share in the first full year after the deal is completed.
The directors at Centamin are set to unanimously recommend the deal to shareholders.
“This transaction is an endorsement of Centamin’s achievement in re-establishing Sukari as a world-class operation and occurs as the Egyptian Government has taken important steps to attract foreign investment to develop the country’s significant geological potential,” James Rutherford, chair of Centamin, said.
“The Centamin board believes that the strategic merits of the transaction are compelling and that the terms offer Centamin shareholders participation in the continued growth of our operations under the stewardship of Anglogold Ashanti,” he added.
“The transaction will allow our assets to grow as part of Anglogold Ashanti’s larger, diversified portfolio, benefitting from Anglogold Ashanti’s track record of responsibly developing and operating large-scale open pit and underground mines in Africa in close partnership with the host governments and communities,” Martin Horgan, Centamin’s CEO added.