Newmont (NEM) Shares Edged Higher on Newcrest Regulatory Approvals

The Newmont Corporation (NYSE: NEM) share price edged 0.80% higher after Newcrest Mining announced that it had received all the regulatory approvals required for its acquisition to proceed. Newmont wants to acquire Newcrest Mining in a deal worth A$26.2 billion ($16.68 billion).

However, despite receiving all the necessary approvals from regulators, including the Australian Foreign Investment Review Board and competition authorities in Australia, Canada and Papua New Guinea, Newmont Corp still has to get shareholder approval during an October 13, 2023 meeting. 

Newcrest is Australia’s largest gold mining company, and the combination with Newmont Corp would create the largest gold mining companies globally, a position that Newmont currently holds. Newcrest had voted in favour of the combination in May this year, with the only hurdle remaining being 

If successful, the acquisition of Newcrest Mining by Newmont Corp would be the third-largest transaction in history involving an Australian company. Newmont shares have fallen 29.55% in the past six months as investors remained unimpressed by the pending acquisition. 

Therefore, investors and analysts alike are worried that the company’s shareholders may decide not to approve the combination at the upcoming general meeting. The meeting’s outcome remains to be seen as uncertainty looms over the deal's fate. 

Newcrest shareholders will receive 0.400 Newmont shares for each share held, with an implied value of A$29.27 a share, as of May 2023. The decline in Newmont’s share price lowered the premium the company paid for Newcrest, which stood at 30.4% in May. 

Newmont also allowed Newcrest to pay a franked special dividend of up to $1.10 per share on implementing the deal, which returns tax credits to Australian shareholders. Newmont expects to have approximately 8 million ounces of combined annual gold production once the deal closes, with over 5 million ounces from 10 long-life and low-cost mines.

Newmont, headquartered in Denver, Colorado, said it would have combined annual copper production of approximately 350 million pounds from Australia and Canada. Newmont said on Wednesday it had received approvals from the Securities Commission of Papua New Guinea and the Philippine Competition Commission.

Newmont Corp. (NEM) stock price. 

The Newmont Corp share price edged 0.80% higher to trade at $36.64, from Thursday’s closing price of $36.35.