South African gold miner Gold Fields, via its subsidiary Gruyere Holdings, has announced plans to acquire Gold Road Resources in an enhanced deal that values the Australian gold miner’s equity at A$3.7 billion (US$2.39 billion).
- Gold Fields plans to acquire Gold Road Resources in a deal worth A$3.7 billion.
- Acquisition will give Gold Fields full control of Gruyere gold mine in Western Australia.
- This marks the third major gold sector transaction in the last six months due to soaring gold prices and geopolitical tensions.
South African gold miner Gold Fields, via its subsidiary Gruyere Holdings, has announced plans to acquire Gold Road Resources in an enhanced deal that values the Australian gold miner’s equity at A$3.7 billion (US$2.39 billion).
The buyout, announced Monday by both companies, will give Gold Fields full control of the low-cost, long-life Gruyere gold mine in Western Australia, which it currently operates through a joint venture with Gold Road Resources, Reuters reported.
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Gold Fields currently holds the other 50% interest in the Gruyere gold mine, and said that the consolidation forms part of its strategy of improving portfolio quality via long-life assets.
This marks the third major gold sector transaction in just six months, as soaring geopolitical tensions drive gold prices to record highs and intensify merger activity in one of the world’s hottest mining markets.
Earlier this year, Northern Star Resources agreed to acquire De Grey Mining in an all-share deal valued at A$5 billion, while Ramelius Resources moved to take over Spartan Resources, creating a combined A$4.2 billion entity.
A robust gold price, coupled with a weaker Australian dollar, has made local producers especially appealing to global investors, one investment banker noted.
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Bellevue Gold, valued at A$1.3 billion, is widely seen as a potential next target after hiring UBS last month to conduct a strategic business review.
Under the terms unveiled on Monday, Gold Fields has sweetened its bid for Gold Road Resources, offering shareholders a fixed cash payment of A$2.52 per share along with a variable cash component tied to the full value of each shareholder’s stake in Northern Star Resources.
The new offer represents a notable increase from the initial March proposal of A$2.27 per share plus the variable component, a deal Gold Road had dismissed as “highly opportunistic.”
