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AngloGold Ashanti has agreed a £1.9bn deal to take over rival gold miner Centamin in a step towards consolidation in precious metals mining that also deals a blow to the London stock market.
If the transaction goes ahead, Centamin will be the latest mining group to leave London. The market has struggled since Randgold left following its merger with Barrick Gold and Russian gold miners’ exodus in the wake of Moscow’s invasion of Ukraine.
The cash and shares deal will add one of the largest gold mines in Egypt, the Sukari mine, to the portfolio of AngloGold, the world’s sixth-largest gold miner.
With gold prices near record highs, the gold mining industry has been consolidating. Market leader Newmont bought Australia’s Newcrest for $19bn last year, and last month Gold Fields paid $1.6bn for Canada’s Osisko Mining.
AngloGold’s Johannesburg shares dropped nearly 10 per cent on news of the deal, while Centamin’s shares rose 24 per cent in London.
AngloGold moved its primary listing from Johannesburg to New York last year to access deeper pools of capital, in the hope of boosting its valuation.
If the deal goes ahead, Centamin will join the growing number of mining companies that have ended their London listings after being acquired.
“It is another line in the sand for people to look at London valuations more broadly, versus those in other markets,” said Peter Mallin-Jones, mining analyst at Peel Hunt. “A fair number of London gold miners do seem to trade at lower multiples than similarly sized producers elsewhere.”
The deal would leave Endeavour Mining as the largest precious metals mining company on the London exchange. The company has been mired in scandal this year after firing chief executive Sébastien de Montessus for serious misconduct.
Each Centamin shareholder will receive 0.06983 new AngloGold shares and 12.5 cents in cash, handing them a total of 16.4 per cent of the combined entity. Centamin shareholders will vote on the deal at the end of October.
“Today’s transaction is highly compelling and builds on the strong foundation we have built,” said AngloGold’s chair Jochen Tilk. “It adds to our portfolio as the pre-eminent gold producer in Egypt and offers enormous geological potential that we are very well placed to develop.”
If the deal goes ahead, the enlarged AngloGold will produce about 3mn ounces of gold a year, making it the world’s fourth-largest gold company.
Johannesburg-based AngloGold has gold mines in countries including Brazil, Guinea, Ghana, Tanzania and Australia.
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